Costain Group PLC (LSE:COST) has been fairly busy tidying up financial issues ahead of its results next Wednesday, 23 August, completing a refinancing and agreeing a new payment plan following its triennial pension review.
Shares in the infrastructure construction group have been among the best performers among the civil engineering contractors in 2023, though over five years its near-90% plunge is bottom of the table.
Following its early-2021 strategy update that affirmed its focus on the addressable markets of transport, water, energy and defence, and after resolving some overhands (mostly unsuccessfully) from troublesome contracts last year, and after March's final results and a 'smart motorways' contract win, the shares hit an 18-month high in April.
The stock fell in June after Costain was booted off another highways contract, but the recent newsflow has been more supportive, including a two-year contract win with water company United Utilities.
Last month a refinancing of bank and bonding facilities was agreed, and in June a new payment plan was agreed with its pension scheme trustee.
Broker Peel Hunt said it was "a positive outcome", leading to modestly higher annual free cash flows.
"Moreover, the flexibility to pause the recovery payments before 2027 is notable and provides management with additional investment/returns opportunities."
Analytsts noted that the shares were trading on 3.8 times 2024 earnings per share with the valuation further supported by the net cash position, which was £123.8 million at the end of its last full year, more than half of which was the company's and the remainder by joint operations.