Public sector work increases first-half profits for Costain

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by Lin Freestone

Strong growth in public sector infrastructure work has enabled Costain, the UK civil engineering group, to report a 26% increase in first-half, pre-tax profits of £10.1m.

The group’s current order book shows an increase of 25% when compared to the same period in 2007, and stands at £2bn.

In addition, the company is the preferred bidder for a record £1bn of potential work, including projects to convert London and Manchester’s waste into electricity.

A £60m rights issue in 2007, together with increased banking facilities, has enabled Costain to bid for an increased number of large contracts. The group is targeting blue-chip clients in the public sector, and regulated industries where investment programmes are still in operation despite the economic environment.

The company’s civil engineering division, which represents 80% of its order book, reported an £11.8m profit, with revenue of £280.4m.

There was a higher net loss of £2.6m in the building division. The same period in 2007 recorded a loss of £400,000. Costain has announced an interim dividend of 0.25 pence per share.