A selective approach to tendering, focussing on bidding discipline on risk management, has helped Costain return to profit in the first half of 2021.
The company’s results for the half-year ending 30 June 2021 saw an operating profit of £11.5m on revenue of £556.8m, comfortably in line with the board’s expectations.
This compared to a profit of £5.7m in the same period last year, and saw a strong positive rebound after a combination of Covid pressures and contract disputes of £99.7m surrounding the Peterborough & Huntingdon and A465 road contracts led to a pre-tax loss of £96.1m for the full year 2020.
The company also reported continued momentum, with £334.3m of new work secured, a clear bidding discipline and risk management in place, and a high level of tendering activity reflecting significant market opportunity.
Positive cash generation and a strong cash position were also highlighted in the report, with net cash of £113.0m, up from £102.9m at year end, with the company on course to deliver full year results in line with its expectations.
Alex Vaughan, Costain chief executive officer, said: "We are pleased to report an improved level of profitability and a strong cash position, demonstrating the focus on trading performance and cash generation across the business. We continue to be successful in winning new contracts, building on last year's strong platform and making the most of the significant market opportunities. Our clients across all our chosen markets are continuing to progress their investment plans and to prioritise investment to meet their needs for decarbonisation, digitisation, levelling up and performance improvement.
"We are busy bidding for new work across all of our markets, combining Costain's core strengths and our broader service offering in line with our strategy. Importantly, we are being selective in our approach to tendering, focussing on bidding discipline and risk management. We have good visibility on the completion of contracts for the remainder of this year which gives us confidence in delivering full year results in line with our expectations."