Costain on the prowl for engineering acquisitions

Contractor Costain is looking to acquire specialist engineering practices, chief executive Andrew Wyllie has said, after the firm reported a 52% jump in pre-tax profit in the first half of 2012.

Speaking to Building, Wyllie said the firm had an interest in buying companies specialising in highways, facility maintenance and a variety of specialist engineering areas and was also hiring staff to boost skills and capabilities in these areas.

He said the firm was focused on driving business from 40 to 50 major customers that make investments of billions of pounds in construction projects. Wyllie added that 90% of the firm’s order book was from repeat customers.

“By acquisitions we will continue to target those big customers with a much more integrated service,” said Wyllie. “What our customers require from us is a range of integrated services and someone who can manage the entirety of their investment programme.”

In April 2011 the firm acquired ClerkMaxwell, an engineer specialising in the energy sector, and in August that year it brought Promanex, an industrial support services business.The firm’s results for the six months to 30 June 2012, published last week, showed a 52% jump in pre-tax profit to £15.4m from £10.1m in the first half of 2011. The figures also showed a 2% rise in revenue to £478m, compared with £469m over the same period last year.

The firms growth was driven by a strong performance from its infrastructure division. Infrastructure accounted for 58% of the firm’s revenue in the first half of 2012, up from 46% in 2011. The division’s operating profit nearly doubled to £10.9m from £5.7m over the period.

However, revenue at the firm’s environment and energy divisions both declined 20%, to £127m and £70.5m respectively.