In the six months to 30th June Costain made a pre-tax profit of 拢9.1m on revenue of 拢556.8m.
It ended the period with a net cash balance of 拢113.0m, up from 拢102.9m six months earlier.
During the half-year Costain booked new contracts with a total value of 拢334.3m, mainly from long-term framework agreements, taking the total order book to 拢4.0bn as at 30th June 2021, broadly similar to the beginning of the year.
鈥淚mportantly, all new contracts have been secured on commercial terms which reflect our improved profitability and risk management measures,鈥� chief executive Alex Vaughan said. 鈥淲e have also continued to build positions on our client's major services frameworks which offer further opportunity moving forwards.鈥�
He added: 鈥淲e have good visibility on the completion of contracts for the remainder of this year which gives us confidence in delivering full year results in line with our expectations."
Current projects include the 拢200m Preston Western Distributor Road. 鈥淭his complex major scheme is currently being delivered ahead of schedule, despite the challenges following Cleveland Bridge going into administration,鈥� Alex Vaughan said. 鈥淔abrication of the steel element has recommenced and works on the structures and new highways are progressing with the new bridges over the M55 motorway and Blackpool to Preston railway installed.鈥�
An element of uncertainty is the ongoing legal dispute with National Grid. In June 2020, Costain announced that a termination and settlement agreement had been reached with National Grid to stop work on the Peterborough & Huntingdon gas compressor project following a significant change in scope. The agreement includes a legal process, through adjudications, to agree up to 拢80.0m of identified compensation events, recover costs to date and eliminate a potential liability to National Grid for completing the works.
Costain鈥檚 2020 interim results showed a charge to the income statement of 拢49.3m reflecting the cash position at termination. The legal process is ongoing, and all adjudications are expected to be filed by December 2021. However, the final outcome could be anything between Costain receiving 拢50m or having to pay out 聽拢57.3m. Any necessary cash adjustments will be made in the first quarter of 2022, the company said.
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