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Costain eyes acquisitions to land big spenders

Costain is considering a number of acquisitions in a bid to increase its appeal to “big spending customers”.

In an interview with Construction News, chief executive Andrew Wyllie said the firm’s offer for Mouchel was still on the table, while several other deals are being considered.

“We want to accelerate the development of the business,” said Mr Wyllie. “There are a number of acquisitions we are looking at.

“The big customers want to work with fewer tier one contractors over longer periods and we’re positioning ourselves to accommodate them by transforming the company and increasing our consulting abilities.”

Announcing its annual results for 2010 today, the group posted a slight decrease in turnover from £1.06 billion in 2009 to £1.02bn. Mr Wyllie attributed the slight decline to deliberate actions taken to reduce the group’s exposure to the health and education sectors.

Pre-tax profits grew by 41 per cent to £27.9 million and the firm has maintained long-term earnings visibility with an order book of £2.4bn. Repeat order customers account for more than 80 per cent of the firm’s order book.

Mr Wyllie is looking to capitalise on substantial investments in infrastructure over the coming five year period. Critical transport, energy, water and waste infrastructure projects are the group’s primary focus.

He said the government deserved credit for pledging faith in infrastructure but the industry must retain a sense of perspective over the coming budget.

“We have to face the reality of the situation we find ourselves in,” he said. “Could we spend more? Sure we could, but we must be realistic.”

A Costain/Skanska joint venture was this morning awarded the Crossrail advance civil engineering works at Bond Street station worth up to £100 million.

The job is the third contract to be awarded to the JV on the Crossrail scheme.

Works comprise of the construction of two station box structures, western ticket hall and eastern ticket hall to provide surface access to either end to twin mined platform tunnels.

The team beat off competition from Carillion, a Balfour Beatty/Morgan Sindall/Vinci JV and a Laing O’Rourke/Strabag JV.

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