Costain announces profit rise of 33% and wins preferred bidder status for £350m of water contracts.

Costain has announced a 33% rise in pre-tax profit to £8.1m thanks to its increasing amount of work in the water industry. Group turnover was also up 15% to £339.9m for the six months ended 30 June 2004.

The engineering and construction group has also announced that it has been selected as preferred bidder for two framework agreements with Thames Water and Yorkshire Water. Costain expects the value of the contract awards to be £350m, with the possibility of extending the contracts for a further five years.

Chief executive Stuart Doughty said: "These are two major contracts which further consolidate Costain's leading position in the water sector. These contracts follow on from the success of Costain's AMP3 work for both companies due to be completed within budget and ahead of schedule".

The water sector accounts for 35% of Costain’s business and the company said it had delivered £225m of work during the period. It expects 50% of its contracting business to come from water asset management contracts by 2006.

Chairman David Jefferies said: “We have had a very good first six months are pleased with the continuing progress of the Group. We have had a good start to the second half and the forward order book now stands in excess of £1bn.”