Costain reported a 34% rise in underlying operating profit for the first half of the year in its latest results this week, as revenue grew and it bumped up its interim dividend by 10%.
In the six months to the end of June, underlying operating profit increased to £21.2m from £15.8m in the first half of 2016 as revenue rose to £874.5m from £791.4m.
The group stated the jump in operating profit was due to a continued strong performance in the infrastructure division and a significant improvement in the natural resources division, where there has been no additional impact from the legacy waste PFI contract compared to last year.
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The company had a net cash balance of £87.5m versus £69.2m the year before. The order book stood at £3.7bn – 90% of which continues to be repeat business – versus £3.9bn in the same period a year ago.
Chief executive Andrew Wyllie said: “We are transforming rapidly to differentiate Costain as the UK’s leading smart infrastructure solutions company. We are delivering technology-based solutions demanded by our clients who are spending billions of pounds, underpinned by legislation and regulation, to meet ever more complex challenges to enhance the nation’s infrastructure.
“Costain is on course to deliver results for the year in line with the board’s expectations.”
As well as the firm’s results, it has also announced a deal to exit its Greater Manchester waste PFI contract with operator Viridor Laing.
The firm said the settlement covered all of its obligations on the project and was in line with previous provisions.
It will now hand over facilities on the project by the end of September.
Over the last three years Costain has revealed ever mounting losses on the £400m legacy waste facility contract awarded a decade ago, which covered the provision of 46 facilities across 23 locations.
The project had been hit by design problems and the failure of a key subcontractor, TEG, which was providing compositing facilities.
As a result, Costain announced in 2014 it was pulling out of bidding for waste sector projects altogether.
Last year alone Costain revealed a £15m loss in relation to completing the legacy PFI contract.
