Costain on course to double profits

Engineering solution provider Costain revealed a 38% jump in full year adjusted operating profit, increased its order book and said it was on course to double profits in the medium-term.

Adjusted profit rose to £24.1m for the year ended 31 December 2011 from £17.4m a year earlier. Adjusted pre-tax profit slipped to £25.5m during the year from £27.9m before. Revenue fell to £986.3m from £1.022bn.

Costain, which has won projects such as the £400m London Bridge redevelopment, said the year-end order book increased to £2.5bn compared to £2.4bn in 2010. More than 90% came from repeat orders.

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Alongside an increased order book, Costain said it had maintained strong cash balances and increased its final dividend.

"Our confidence in Costain's future, and in achieving our ambition of doubling profit over the medium-term, is reflected in the board's recommendation to increase the final dividend for the fifth successive year," the company said in a statement.

Commenting on UK trading, it said the economy faces unprecedented challenges.

"We have therefore maintained a focus on targeting and working with blue chip customers in sectors whose spending activity is underpinned by strategic national needs, regulatory commitments or essential maintenance requirements."

It cited the government's recently announced go-ahead for the second high-speed rail link, but beside this increase from the public sector, the majority of future spending is expected to continue to come from the private sector.

Costain has increased the annual dividend 8% to 10p per share.