Costain Group (LSE:COST) PLC (LSE:COSTL) swung back into the black in the first six months of 2021 and predicted that its results for the year as a whole would be in line with expectations.
Operating profits came in at £11.2mln in the first half to 30 June, compared with a loss of £90.4mln in the same period of 2020, on revenue of £556.8mln, up from £459.9mln, the infrastructure company announced in its earnings statement. Pretax profits were £9.1mln, compared with a loss of £92.3mln.
Last year’s figures included charges of £94.7mln relating to the contracts for the Peterborough & Huntingdon gas station and the A465 road scheme. Adjusted for these provisions, half-year pretax profits climbed to £9.4mln from £3.8mln.
Net cash at the end of June stood at £113mln, up from £102.9mln at the end of 2020.
Costain won contracts worth £334.3mln in the first half, taking its order book to £4bn at the end of June 2021, similar to end-December 2020 levels.
“We have good visibility on the completion of contracts for the remainder of this year, which gives us confidence in delivering full-year results in line with our expectations,” said chief executive Alex Vaughan.
“Costain is in a strong position with a high volume of secured long-term programmes and a positive market outlook, in particular the UK government's commitment to invest in infrastructure to support the levelling up of our economic activity and decarbonisation of our environment,” he added.
Costain said the legal process regarding the termination of the Peterborough & Huntingdon gas station contract with National Grid (LSE:NG.) is ongoing. As previously indicated, the group does not expect the final charge to exceed £57.3mln. Any cash adjustments would be made in the first quarter of 2022, it said.
The group is not paying an interim dividend, but said it will review this position depending on its performance, cash flow requirements and balance sheet.