Engineering firm Costain has seen its infrastructure revenue surge by 20% to £562.3 million in its year end results for 2012.
The group said investment in business development enabled it to take advantage of a number of major opportunities in the market. As a result, adjusted profit from operations rose to £26.1 million (2011: £10.2 million).
The order book for the division has grown to £1.6 billion (2011: £1.5 billion) and the level of tendering activity remains high, the group said.
Costain’s Environment division focuses on the water market, and revenue decreased to £232.6 million, from £375.4 million in the same period last year. Profit only fell £2.5 million to £17.5 million. The group said “the reduction in revenue has been influenced by our strategic priority on other activities in the Group.”
However, in the water sector, the Group said it is making “good progress” on the AMP5 framework contracts with Northumbrian Water, Severn Trent, Southern Water, United Utilities and Welsh Water. During the period the Group was also awarded a contract by Severn Trent Water to replace its largest covered service reservoir sited near Ambergate in Derbyshire.
During 2012 Costain entered into a joint venture with Severn Trent, called Severn Trent Costain (STC), to provide complete business water and wastewater management services to high volume commercial and industrial water users.
Costain said its position in the water sector gives the Group a strong platform to win new contracts and extensions as the water sector prepares for the next regulatory review period, commencing in 2014.
Revenue for the group at 31 December 2012 stood at £934.5 million, down from £986.3 million in 2011. Adjusted profit before tax grew 16% to £29.5 million, from £25.5 million in the previous year.
The forward order book stood at £2.4 billion more than 90% of which was from repeat orders including new awards and extensions to existing contracts (2011: £2.5 billion).
David Allvey, Chairman, commented:
“Costain has delivered another strong performance in 2012, and our confidence in the Group’s future is reflected in the Board’s recommendation to increase the final dividend for the sixth successive year.
“Our progress in recent years, despite challenging economic conditions, is a reflection of the Group’s strategic focus on meeting the complex needs of customers by ensuring that Costain provides integrated consulting, project delivery and operations and maintenance capability.
“The Group believes that, driven by innovation, the strategic development of the business will be accelerated as we work with customers on their future programmes.
“With a robust balance sheet, positive net cash position and banking and bonding facilities in place, we have the resources to continue to grow the business organically and by acquisition.”