Costain breaks £1bn revenue barrier

Costain has posted solid results for the year to December 2014, with revenue breaking the £1bn mark, and a record £3.5bn order book.

Revenue rose 17% to £1.1bn, up from £960m, while pre-tax profit grew 75% to £22.6m, up from £12.9m.

Costain’s results were boosted by strong performance and profit growth at its infrastructure division, offsetting losses in its smaller natural resources division and land development venture in Spain.

The firm’s infrastructure division - which delivered major schemes including the redevelopment of Reading station (pictured) last year - posted a 40% increase in revenue to £785.2m, up from £560.6m, with operating profit grew 22% to £36.8m, up from £30.1m.

However Costain’s natural resources division posted an operating loss of £3.2m, after making a £9.5m operating profit the previous year, with the loss attributed to issues on its Manchester waste PFI contract, awarded in 2007.

The natural resources division posted a 16% decrease in revenue to £335m, down from £397.6m.

Meanwhile, the firm also posted a £1.3m after-tax loss on its “non-core” land development activity in southern Spain, where the firm holds a portfolio fo 500 hectares of land in a 50:50 joint venture with Santander Bank.

Costain’s order book grew 17% to £3.5bn, up from £3bn, with 90% of the order book comprising repeat orders, which the firm attributed to its strategy of focusing on long-term contracts with major infrastructure clients.

Work added to the order book included jobs for Network Rail, the Highways Agency, National Grid, BAE Systems and Southern Water.