Restructuring costs brought profit down in first half, firm says
Pre-tax profit was down at Costain in the first half as revenue at the engineering firm remained flat.
Interim results published this morning showed income of 拢644m in the six months to 30 June 鈥� just 0.1% down on the same period the previous year 鈥� as strong performance in its natural resources business balanced out a contraction in transportation work.
Profit before tax was 拢8.5m, a 24% drop from 拢11.2m in the first half of last year.
The group reported that after adjustments 鈥� which included 拢2.1m in restructuring costs associated with its transformation programme and a 拢5.3m loss on the impairment of an intangible asset 鈥� its profit before tax stood at 拢15.9m, 19.5% up from the adjusted figure for HY22.
Chief executive Alex Vaughan, who was named CEO of the year at the 2022 好色先生TV Awards, said the firm鈥檚 transformation programme to create efficiencies within the group would deliver benefits in the second half of the year and into 2024.
鈥淭here remains a positive outlook across our markets, while recognising the short-term rephasing of the government鈥檚 transport spending,鈥� he said.
鈥淲e 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鈥�.
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Transportation remained Costain鈥檚 largest function, though revenue was down 1.5% to 拢487m as rephasing and rescoping on major roads schemes dragged income down.
鈥淲e remain mindful of the macro-economic and geopolitical backdrop, recognising the challenges it has created for inflation and energy costs, and its impact on the rephasing and rescoping of some major contracts, in particular in Transportation,鈥� the report said.
Withing the transport business, rail revenue increased 18.3% because of the volume of work delivered by the Skanska Costain Strabag joint venture to construct the southern section of the route.
The group reported it had 90% of revenue secured for the second half of the year with an order book worth 拢2.5bn, and said it was trading in line with expectations for the full year.
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