Costain on track with record order book, new BAE contract

5th Nov 2014 09:28

Engineering group Costain said on Wednesday it is on track to hit full-year expectations with a record order book, as it announced a new contract with defence group BAE Systems.Costain has been appointed by BAE as one of its framework contractors on the eight-year £300m-plus programme to redevelop its submarine site in Barrow-in-Furness, Cumbria.Chief Executive Andrew Wyllie said BAE is "a major new customer for us". Work is expected to start early next year.In a separate statement, Costain said its forward order book has increased to a record level of £3.3bn, from £3.2bn at the half-year stage and £3bn at the start of 2014.The company, which works in various sectors including rail, nuclear and power, said some £900m of revenues have been secured for 2015, while £2.2bn of revenues have been secured for 2016 and beyond, providing "good long-term visibility", the company said.Over 90% of the order book is made up of repeat business, it added."The group is benefiting from its unique and well-positioned strategy, focusing on major customers who are investing billions of pounds meeting national needs in energy, water and transportation, and who require solutions to their complex business challenges," Costain said.The stock was 1.2% higher at 290.6p by 09:20 on Wednesday.The shares, up 14% over the last three months, have been reflecting increased contract momentum, according to analyst Andrew Gibb from Investec. "[However] we continue to see further upside, as the group further utilises the £70.3m of capital it raised in March," he said.