REG - Costain Group PLC - New Payment Plan with Pension Scheme Trustee

CostainAnnouncement

30/06/2023 07:00

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RNS Number : 4533E  Costain Group PLC  30 June 2023

THIS ANNOUNCEMENT CONTAINS INFORMATION WITHIN THE MEANING OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

 

 

Costain Group PLC

30 June 2023

 

 

Costain Agrees New Payment Plan With Pension Scheme Trustee

 

Costain Group PLC ("Costain" or the "Group") announces that agreement has been
reached with the Trustee of the Company's defined benefit pension scheme
("Costain Pension Scheme" or "Scheme") on 31 March 2022 triennial actuarial
funding valuation and ongoing contributions to the Scheme.

 

The new contribution plan from the Group to the Costain Pension Scheme runs
from 1 July 2023 to 31 March 2027 and is for a payment of £3.3m per year,
payable in pro rata monthly instalments, which will increase in line with
inflation (CPI) each 1 April. This replaces the previous contribution plan to
the Scheme, which from April 2023 had increased to an annual payment of
£11.98m paid in monthly instalments.

 

As a result of the new contribution plan, the full year 2023 pension
contribution payment by the Group will total £7.4m, and payments for 2024 and
thereafter will be £3.3m annually, plus inflationary increases as outlined
above.

 

The Scheme funding position on a Technical Provisions basis as at 31 March
2022 was a deficit of £25.1m (a funding level of around 97%).

 

An assessment of the Scheme funding position will be carried out each 31 March
and, if the funding level (on a Technical Provisions basis) is more than 101%,
contributions will stop from the following 1 July to 30 June. If the funding
level falls below 101% at the following 31 March, contributions will resume
for the next year starting 1 July to 30 June at the agreed new level.

 

In addition to the contributions set out above, the "dividend parity"
arrangement will continue until 31 March 2027.  Under this arrangement, an
additional matching contribution (the excess of the total dividend above the
Scheme contribution) to the Costain Pension Scheme will be made when the total
of the interim and final dividends for a financial year paid to the
shareholders of Costain Group PLC are greater than the contributions paid into
the Scheme in the previous Scheme financial year, which runs from 1 April to
31 March. If the funding level is above 101% as at 31 March, then no
contributions will be payable in respect of dividend parity for the following
year.

 

Alex Vaughan, Chief Executive Officer, commented:

"This is really positive news for all Costain's stakeholders. It ensures we
can meet the promises we have made to our defined benefit pension holders,
while delivering further cash to the business and increasing the future
financial and operational options for Costain."

 

As at 31 December 2022, the Costain Pension Scheme surplus in accordance with
IAS 19 was £60.2m (HY22: £86.2m surplus, FY21: £67.1m surplus).

 

This announcement contains information that qualifies as inside information.
The person responsible for the release of this announcement on behalf of
Costain is Helen Willis, Chief Financial Officer.

 

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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