Costain’s order book was worth £4.2bn at the end of the year as the company confirmed its full-year results will be in line with the board’s expectations.
A brief trading update released this morning revealed the order book was £300m higher than at the end of 2017. The value of jobs where Costain is a preferred bidder has also increased from £400m in 2017 to around £600m.
Costain’s net cash will finish the year at more than £110m. This will be significantly lower than the £177.7m it reported for 2017, which the firm said was due to the timing of payments.
Chief executive Andrew Wylie (pictured) said 2018 had been “another year of progress” for Costain and highlighted the firm’s “strong balance sheet”, which he said positioned the company well to benefit in a “rapidly-changing” market.
This morning’s update for the year ending 31 December 2018 was released ahead of the full-year results that will be announced on 6 March.
Investors reacted positively to the release and Costain’s shares were up 7.2 per cent in early trading.
Analysts at Peel Hunt said the update was reassuring and maintained their expectation of £56.9m EBITDA on revenue of £1.62bn for 2018.
They highlighted Costain’s strong presence in the highways and rail market should continue to generate good returns.
Last November the company secured places on the two largest lots of Highways England’s £8.7bn regional framework. It expects its workload from the deal to be worth around £1.5bn over the next six years.
A Costain / Skanska / Strabag consortium has also been awarded more than £1.7bn of HS2 civils work around Euston and west London.
However, concerns over the programme have prompted HS2 to open talks with all contractors on the scheme to reduce costs. The start of works was also postponed last summer from March 2019 to June 2019 to allow more time for design work.
Alongside its traditional infrastructure contracting work Costain has moved further into the consultancy market in recent years. In August the firm revealed a third of its workforce was now employed in consultancy or technology roles.