Costain will publish its 2018 results in early March but today gave a trading update confirming that it expects to deliver full-year numbers in line with the expectations after another year of progress in the company’s transformation.
The strategy is to position the company as a high-end “smart infrastructure solutions” providing, rather than a low-rent construction contractor. It is targeting long-term strategic relationships, providing integrated technology-enabled services in regulated markets. This excludes the technically challenging waste-to-energy market, however, which Costain quit after running into difficulties, as several other contractors have done too.
By avoiding facilities management and janitorial services in recent years, and focusing strictly on construction and engineering, Costain has dodged the problems that have dogged many of its peers, including Balfour Beatty, Interserve, Kier and, most notably, Carillion.
Costain ended 2018 with an order book at a record level of £4.2bn, up from £3.9bn at the start of the year, plus a preferred bidder position of £600m, up from £400m a year ago.
The net cash position diminished during the year, from £178m to £110m, which was attributed to the timing of receipts. But Costain maintained a positive net cash position throughout the year, with an average month-end net cash balance of £77m (2017: £97m).
Chief executive Andrew Wyllie said: “This has been another year of progress for Costain. The benefits of our integrated offering, long-term strategic relationships with our clients and strong balance sheet position us well for the future and the significant opportunity we see across our rapidly-changing end markets."