REG - Costain Group PLC - AMP8 Water Framework Win with NWG & Trading Update

CostainAnnouncement

10/01/2024 07:00

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RNS Number : 1624Z  Costain Group PLC  10 January 2024

 

Costain Group PLC

10 January 2024

Costain AMP8 Framework Agreement with Northumbrian Water Group and Trading
Update

Appointment adds to Costain's wins in the new water regulatory cycle

 

Costain Group PLC ("Costain", or the "Company") announces that it has been
appointed by Northumbrian Water Group (NWG) to shape, create and deliver its
strategic infrastructure upgrade programme. The framework will see contracts
awarded with a potential value of up to £670m to Costain during a 12-year
period and builds on recent significant wins in the water sector for the
Company.

The framework contract will see Costain work with NWG and its partners to
shape, create and deliver solutions to meet the strategic needs of its
business plan during Asset Management Period 8 (AMP8). The contract starts
immediately and will run for a seven-year initial term with an option for a
five-year extension.

The work will involve:

·    The design, construction and commissioning of new water and
wastewater treatment assets, asset renewals, asset modifications,
refurbishments and extensions to treatment works.

·    Programmes of investigation and delivery work by asset type,
geography and/or by specialism.

AMP8 will see the biggest investment in the water industry for decades. In
2023, Costain extended into AMP8 its Managed Service Provider contract with
United Utilities and its consultancy work with Yorkshire Water. Costain has
also won funding from Ofwat to support innovation projects.

Trading Update

Costain has had a positive trading year in 2023 and expects to deliver
adjusted operating profit in line with market expectations. As a result, and
reflecting an increase in financial income compared to 2022 and strong working
capital management, together with the accumulation of £25.0m of positive
working capital timings, Costain has ended 2023 with a net cash position of
£164.4m (2022 year-end: £123.8m), significantly higher than market
expectations of £128.6m.

Alex Vaughan, CEO, Costain said:

"Costain is a leading business partner to the water industry, ensuring that
water companies achieve value for money as they meet the needs of their
customers and the regulator during this crucial period for water investment.
We are looking forward to supporting Northumbrian Water in this new working
relationship, upgrading both its wastewater and water treatment infrastructure
to improve people's lives and safeguard the environment. At Costain, we
develop solutions by building collaborative and sustainable relationships with
our customers, and we are excited to begin this vital work.

"This contract win not only reflects our continued growth in the water sector,
but it also reinforces our commitment to improving critical infrastructure in
the North-East of England. This includes major upgrades to the region's
highways and our carbon capture work in Teesside as part of the East Coast
Cluster, generating opportunities for regional suppliers and employment for
local people.

"We are also pleased to report that we have had a positive trading year and
expect to deliver adjusted operating profit in line with market expectations.
Our cash performance has been very strong, driven by continued improved
operational performance, an increase in financial income compared to 2022, and
ongoing positive working capital timings."

 

Costain will issue its results for the financial year 2023 on 12 March 2024.

Enquiries:

 

Investors and
analysts
paul.sharma@costain.com

Paul Sharma,
Costain
+44 (0) 7867 501188

 

Financial media - Headland
                        costain@headlandconsultancy.com

Andy Rivett-Carnac
                                  +44 (0) 7968 997 365

Charlie Twigg
                                         +44 (0) 7946 494
568

 

Notes to editors

 

Costain helps to improve people's lives by creating connected, sustainable
infrastructure that enables people and the planet to thrive. We shape, create
and deliver pioneering solutions that transform the performance of the
infrastructure ecosystem across the UK's transport, energy, water, and defence
markets.

 

We are organised around our customers anticipating and solving their
challenges and helping to improve performance. By bringing together our unique
mix of construction, consulting and digital experts we engineer and deliver
sustainable, efficient and practical solutions.

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