Costain reduces 2014 interim dividend to 3.25p, but on enlarged capital base

DividendMax Ltd.

Costain reduces 2014 interim dividend to 3.25p, but on enlarged capital base


Underlying operating profit2 up 5% to £11.2 million (2013: £10.7 million)

Increase of 8% in adjusted profit before tax3 to £9.1 million (2013: £8.4 million)

Record forward order book up 10% to £3.2 billion (2013: £2.9 billion) with over £700 million of new contracts and extensions secured in the first half. Over £950 million of revenue secured for FY 2014 by 30 June (2013: over £850 million secured for FY 2013)

New contracts in the period include:

o Appointment to Network Rail's £2bn National Electrification Programme

o Further Barrow Gas Terminals commission with Centrica

o Crossrail North East Spur appointment by Network Rail

o Appointment by National Grid to three transmission frameworks

Nature of new contract awards reflect Costain's position as the engineering solutions provider with an established reputation for innovation

Over 90% of high quality order book comprises repeat orders and over 90% lower risk, target cost, cost reimbursable forms of contract

Successful capital raise of£70.3 million (net of expenses) to take advantage of the growing number of opportunities available to accelerate the Group's development

Net cash balance of £133.8 million (2013: £64.3 million)

Interim dividend of 3.25 pence per share on enlarged capital base (2013: 3.75 pence)

David Allvey, Chairman, commented:

"We have delivered a strong performance in the first half of the year. As well as increases in revenue and underlying operating profit, our order book continued to grow and now stands at a record £3.2 billion.

"Costain has an established reputation for innovation that enables the Group to win large, long term contracts addressing the UK's essential energy, water and transportation needs.

"The successful capital raise earlier this year is enabling us to take advantage of a growing number of opportunities to accelerate the Group's development.

"Costain remains on course to deliver a result for the year in line with the Board's expectations."

Companies mentioned