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City Site - Contractors positive ahead of interims

FINANCE

THE TRADING statements that are emerging as companies enter the closed period ahead of their interim results have brought generally positive messages from the larger quoted contractors, tempered by news on more restructuring.

In Costain's case, the City seemed to shrug off news of the closure of its international division at a cost of up to £14 million in provisions and a shake-up at its oil and gas business. With an order book up 19 per cent at £1.9 billion and the group's core businesses performing in line with expectations, the changes were seen as evidence of new chief executive Andrew Wyllie making his mark, rather than as a sign of malaise. But the City may be less forgiving if more provisions emerge next time around.

Morgan Sindall received a cooler reception to the news that its infrastructure services arm had been re-organised, which would add to costs this year.

Its shares slipped back although the firm's overall trading picture was as expected and its forward order book had grown by 11 per cent to a record £3.1 billion. Long-term infrastructure contract wins and the strength of the fit-out market both helped.

Balfour Beatty seemed to reassure rather than excite the City with news of a good first half trading performance and an order book that has grown to over £8.5 billion.

Rok also confirmed its trading is in line with expectations and that its first half revenues will be up over 10 per cent. The firm has won social housing contracts worth £300 million.

But Kier Group's shares shot up 8 per cent after an update said full year profits would be at the high end of expectations.

The firm's regional construction arm has a record order book and its housing arm has increased completions by 25 per cent during the year and it has a strong forward order book. But the firm has seen some 'seasonal slowing' of the housing market towards the end of June.