Contractor Costain has reported a growth in profits as it focuses its attention on infrastructure and utilising technology-based solutions
Costain is the latest to join a number of other contractors seeing a growth in profits. In the year to 31 December 2016 the firm reported it had seen pre-tax profits rise from £29.9m to £37.5m as turnover grew from £1.3bn to £1.7bn.
Among the reasons behind this was a focus on infrastructure spending and a push to recruit more people into technology-based roles.
Figures from the firm revealed the infrastructure department saw operating profits rise from £50.9m to £56.6m on turnover up to £1,276m from £996m.
Losses were seen in the Natural Resources division. Some £12.6m was lost on turnover of £377m due to problems with the Greater Manchester Waste Disposal Authority PFI contract.
Costain said: “In the period, the Group has incurred further costs and has taken additional provisions to reach Final Acceptance on the contract, which is now targeted this year; and to complete the remaining works when access is available in accordance with the operational running of the plants under an agreed schedule to 2019.
“Costain has received significant payments from, and remains in discussions on further payments with relevant contract counterparties and the Group’s insurers regarding the issues that have arisen on this contract.
“It has been the Group’s policy since 2009 not to pursue fixed price contracts of this nature.”
Technology focused
Chairman Dr Paul Golby said increasing technology use was a key focus for the firm.
“Our major customers are committed to spending billions of pounds to improve people’s lives by enhancing the UK’s energy, water and transportation infrastructures,” he said.
“In order to deliver solutions to their increasingly complex requirements, Costain will continue to provide the broadest range of innovative integrated services and technology-based solutions.
“Costain is well-positioned to take advantage of the opportunities that lie immediately ahead and this, combined with the good visibility we have over the medium-term, reinforces our confidence for the future.”
He added: “Costain today has over 4,100 people and, reflecting the development and changing nature of the business, over 1,200 of those are now in technology, advisory or design service roles.”
Forward-thinking innovative strategy
The firm said it had concentrated on implementing its Engineering Tomorrow strategy, which focused on innovation. This, chief executive Andrew Wyllie said, was paying dividends.
Wyllie said: “These are exciting times with billions of pounds being spent upgrading and renewing the country’s energy, water and transportation infrastructures.
“There is a revolution in the deployment of technology-led innovative solutions to meet the increasingly complex requirements of our national infrastructure needs and we are continuing rapidly to transform our business to be at the heart of the opportunity this presents.
“We started 2017 with a maintained record order book giving good visibility over the medium term and we look forward to the future with confidence.”
