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Support service success for Costain following acquisitions

Costain said it will continue to grow its support services activities following two recent acquisitions.

Posting an interim statement to the Stock Exchange this morning, Costain said it “continues to perform well and trading is in line with the board’s expectations”.

The order book is now £2.4 billion, slightly down on the £2.5bn reported for December. It said 90 per cent is repeat orders from blue chip customers.

Costain said today that the acquisition of Promanex in 2011 has enabled the group to win a £60m operations and maintenance contract from new customer the Oil & Pipelines Agency earlier this year.

Costain - which also acquired engineering consultants ClerkMaxwell - still has £100m in the bank and remains active in the acquisition market.

The firm said 25 per cent of its 2012 order book now comes from support services activities and “this will continue to grow”. 

It added:  “Whilst market conditions remain uncertain, the group has strong financial resources and is delivering on its clear strategy. 

“Accordingly, the board remains confident of meeting its expectations in 2012 and is committed to delivering its ambition of doubling profits in the medium term.”

Costain saw a 9 per cent dip in pre tax results for 2011, with revenue down form from £1.02 billion to £986m. It said then that the 2010 figures were bolstered by a transfer of six PFI schemes into its pension pot to tackle a deficit.

The group has also since transferred another two PFI equity investments valued at £20.3 million into its pension scheme.

The company today that it is undergoing “significant and ongoing transformation” as a result of the successful implementation of its “Choosing Costain” strategy. That strategy is focused on blue chip customers, whose major spending plans are underpinned by strategic national priorities.

In addition, the group has preferred bidder positions of £400m, while over £800 million of revenue has been secured for 2012.

The board is recommending an increased final dividend of 6.75 pence per share, taking the total dividend for the year to 10 pence per share (2010: 9.25 pence per share), which is an increase of 8 per cent.