REG - Costain Group PLC - Trading in line with strong cash performance

CostainAnnouncement

20/07/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220720:nRST0937Ta&default-theme=true

RNS Number : 0937T  Costain Group PLC  20 July 2022

 

Costain Group PLC

20 July 2022

 

 

Trading in line with expectations with strong cash performance

 

 

Costain announces a trading update for the six months ended 30 June 2022,
ahead of its interim results scheduled for 24 August 2022.

 

Operating performance: strong delivery and inflation resilience

 

The Group has delivered a good performance in the first half, with revenue
ahead of market expectations(1), reflecting the inflation recovery mechanisms
built into contracts as we passed through increased costs with higher prices,
together with increased volumes delivering revenue growth in Transportation
and Natural Resources. We expect revenue for the full year to be ahead of
market expectations.

 

Adjusted operating profit for the first half of 2022 is in line with
management's expectations, with absolute profitability increasing
year-on-year. We expect first half 2022 adjusted operating margin to be flat
year-on-year, reflecting the continuing progress in the business offsetting
inflation impacts. Supply chain pressures have been well managed ensuring a
strong and robust operational performance across our contracts.

 

Our expectations for full year 2022 reported and adjusted operating profit are
unchanged and we continue to expect good growth year-on-year.

 

Cash performance: ahead of expectations

 

Cash performance in the first half has been strong, driven by efficient
working capital management and operating performance. Net cash at 30 June 2022
is around £95m, ahead of market expectations and we expect to deliver further
positive net cash during the second half of the year.

 

Market performance: delivering against strategy

 

The Group's four chosen markets of Transport, Water, Energy and Defence
continue to offer growth opportunities.

 

Transportation continues to operate well across our HS2, other Rail and
Highway activities with a high volume of tender activity for further road and
rail programmes, and aviation frameworks. In the period we have secured
contracts including the first phase of the Lancaster South scheme and the TfL
Piccadilly line design, and we are delivering growth on our Highways RDP
programme.

Water performance is stable with good visibility across our five-year water
AMP7 programmes for Anglian Water, Severn Trent Water, Southern Water, Thames
Water and United Utilities, while Tideway continues to perform to plan.

Energy has shown good revenue growth in our design and programme management
consultancy activities, building our position in energy transition, with wins
including the bp net zero contract at Teesside and our first framework
appointment by Shell. Our contracts with Cadent, EDF and Sellafield continue
to perform strongly.

Defence includes key programme management contracts for our clients such as
AWE and Babcock at Devonport, and is delivering increased revenue growth
across our current defence portfolio.

 

Alex Vaughan, Chief Executive Officer, commented: "I am pleased with our
performance in the first half of the year as we continue to generate strong
free cash flow, deliver against our strategy and meet our customers' needs
across our four markets. Our continued progress, supported by a strong order
book and pipeline, gives us confidence for the remainder of the year and
beyond."

 

 ((1)) First half market expectations are based on research from Investec,
Liberum, Numis Securities and Peel Hunt.

 

Enquiries

 

Investors and analysts

Louise Bryant,
Costain
+44 7813 210 809

 

Financial media - Headland
   costain@headlandconsultancy.com (mailto:costain@headlandconsultancy.com)

Andy
Rivett-Carnac
+44 7968 997 365

 

 

Notes to editors

 

Costain helps to improve people's lives by creating connected, sustainable
infrastructure that enables people and the planet 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.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTBKKBDQBKKBOB