The chief executive officer at Costain says the company is in a strong position with secured long-term programmes and a positive market backdrop.
The comments from Alex Vaughan come despite a pre-tax loss of £92.3 million during the first half of this year from an £8.4 million profit in the same period last year.
The smart infrastructure solutions company says all contracts are now operational following the impact of COVID-19, with necessary safety measures in place.
In its results, it says the reported operating loss reflects the previously announced charges in relation to the Peterborough and Huntingdon contract £49.3 million) and the A465 Heads of the Valleys road contract (£45.4 million) to adjust the revenue recognised to the amount of cash received to date on the contracts.
However the company has seen good levels of activity and opportunities with over £2 billion of contracts and frameworks secured in the first half and an order book of £4.2 billion including £0.9 billion of secured revenue for 2021.
Alex Vaughan, chief executive officer, commented: “We are now back on site across all of our operations with strict safety measures in place to protect our teams and the communities we work in. I would like to pay tribute to our people who have done everything they can to look after one another and to do the right thing by our clients, communities, society and to protect our business during this pandemic.
“We are clearly disappointed with the recent arbitration outcome in relation to the A465 contract which, together with the mutual termination of the Peterborough & Huntingdon contract, has resulted in significant revenue adjustments for these long-standing projects. We have in place clear actions to resolve the financial position on these contracts and importantly we have taken decisive action to prevent such issues from reoccurring.
“The equity raise in May has already helped us to capitalise on the immediate opportunities in our infrastructure markets as we successfully secured over £2 billion of contracts in the first half, many of which incorporate our consultancy and digital capabilities in line with our strategic focus. There remains a strong pipeline of further opportunities which we are actively targeting.
“Looking ahead, assuming no further sustained COVID-19 lockdowns, we are confident of delivering growth in profits and margins next year. Although we are mindful of the macro-economic uncertainties ahead, Costain is in a strong position with secured long-term programmes and a positive market backdrop, in particular the UK Government’s drive to progress investment in infrastructure so that it is better, greener and faster in support of the nation’s economic recovery.”
Photo credit: Costain
For today’s rail news from railbusinessdaily.com click here.
