Costain order book growth alleviates May Gurney disappointment

27th Jun 2013 09:02

Engineer Costain reassured that it remained on track to meet full year expectations, with its order book swelling by over a fifth. The company's pre-close interim update allayed fears its progress might have been temporarily derailed by the disappointment of being defeated in a bidding war for May Gurney by rival Kier. In the first half of the year, Costain has already secured over £850m of revenue has been secured for 2013, representing more than 80% of most forecasts. The group won new contracts and extensions worth more than £900m during the period, meaning its forward order book increased to £2.9bn at period-end from £2.4bn at the end of 2012 and is preferred bidder for over £500m of further work. Contracts won during the first half of the year include the design, fit-out and commissioning of railway systems for the giant Crossrail project in London, the Thames Water's AMP6 investment programme and a framework contract with Transport for London for the Hammersmith Flyover strengthening project. Broker Investec noted that the group remained "at the top of the construction leaderboard" on a 12-month view. "We believe this outperformance is reflective of the group's disciplined focus on a core client list and its continued net cash position," said analyst Andrew Gibb."Today's statement underlines the on-going resilience of the business."Shares in Costain were up 1.6% at 275p at 09:30 on Thursday.OH