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Profits rise 23% at Costain on lower turnover

25 Aug 11 Costain has reported profit before tax up 23% on lower turnover thanks to a decision to withdraw from lower-margin activities.

Revenue for the half year ended 30 June 2011 was £468.5m, including Costain’s share of associates and joint ventures, compared with £533.4m for 2010.  Profit from operations rose 6% to £9.3m (2010: £8.8m), and profit before tax increased 23% to £10.1m (2010: £8.2 million).  Basic earnings per share were up 19% to 11.9p (2010: 10p).

Major new contract awards since the beginning of the year mean that the order book was £2.3bn, at 30 June 2011. More than £900m of revenue has been secured for 2011 at the half year.

The order book includes £500m revenue for 2012, compared with June 2010’s figure of £570m More than £1.3bn of revenue is secured for 2013 and beyond. It was also preferred bidder for more than £400m of work at the period end. 

"We are delighted with another strong set of results, with a significant increase in profit before tax, an enhanced cash balance, and a robust order book including further new contract awards from our major customers,” said chairman David Allvey. "The implementation of our 'Choosing Costain' strategy is transforming the Group, as we continue to develop or acquire the skills and capabilities to reinforce our position as one of the UK's leading Tier One engineering solutions providers.

"Looking ahead, despite continuing challenging market conditions, we see significant opportunity for the continued successful implementation of our strategy and the delivery of the Board's ambition of doubling profit over the medium term. The Board expects to report continued progress at the year-end in line with its expectations."

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