NuGen Properties

Roads cull stymies Costain growth

Costain’s rail revenue grew in the first half

Increased work in the water, defence and nuclear sectors compensated for the “rephasing and rescoping” of roads contracts, the company reports.

In the six months to 30th June 2023, Costain made a pre-tax profit of £8.5m (2022 H1: £11.2m) on revenue of £664.4m (2022 H1: £665.2m).

Costain operates through two divisions – Natural Resources and Transport. Transport brings in  three-quarters of the business and last year made more than six times the profit that Natural Resources made (in the first half of the year). This year, Natural Resources’ operating profit of £7.5m was bigger than the £6.9m made from Transport.

Most of Costain’s transport work is either on HS2, as part of the Skanska Costain Strabag joint venture, or for National Highways. With cancellation of the smart motorways programme and completion of the Preston Western road, Costain’s road revenue declined by 16% in the first half of the year. Rail revenue, by contrast, increased by 18% thanks to HS2.

Despite inflation pushing up contract values over the past couple of years, Costain has seen no growth in the past year and little prospect of any ahead. Its order book of £2.5bn is £200m lighter than a year ago and preferred bidder book of £1.5bn is £100m down on the year.

Chief executive Alex Vaughan was optimistic, however. “There remains a positive outlook across our markets, while recognising the short-term rephasing of the government’s transport spending,” he said. “We expect that the sectoral growth we have seen in Natural Resources, together with the rephasing and rescoping of some infrastructure projects in Rail and Road to continue for the remainder of the year and into 2024.

“While we are mindful of the macro-economic backdrop, recognising the timing of customer procurement cycles, the quality of our secured and preferred bidder work gives us good visibility on future revenue, with more than 90% of revenue secured for the remainder of 2023. Our expectations for 2023 remain unchanged and we continue to be confident in the group’s long-term prospects.”

Got a story? Email [email protected]

Source link

Customer Reviews

Nugen Properties

Customer Reviews

Dan Morten 18/01/22

Easy to work with, Jordan and the team were professional and were easy to communicate with.
Would highly recommend.

Di Hayes 20/08/22

NuGen Properties built an extension to the rear of my property, replacing the old conservatory. I am so pleased I chose this company. From the initial quotation, through the build and after they were professional, polite & well mannered. They kept the site tidy throughout the build and kept me informed of each stage as it happened. The work was finished to a good standard and I have had nothing but compliments on their work. I am already planning for them to come back and do some more work for me in a few months. I would 100% recommend them.

Bradley Eyles 20/06/23

Nugen were fantastic throughout the works they carried out on my property, Jordan provided constant updates and ensure any questions I had were always answered. All works were completed in a timely fashion, on budget and exceptional customer service. Highly recommend!

Sonny Carter-heyward 29/02/22

Brilliant service, renovated my house to make a dream a reality. Thanks guys

sitemanager 22/01/23

Great firm to communicate with fast and good quality work.