(Sharecast News) - Infrastructure company Costain posted a slump in first-half profit on Wednesday but said it was on track to meet revised full-year estimates following June's profit warning.
In the six months to 30 June, reported pre-tax profit fell to £8.4m from £19.9m in the first half of last year as revenue declined 22% to £599.2m. Costain had already warned in June that trading in the first half saw a number of delays to the timing of contract start dates and new awards and the cancellation of a project.
The results also include a one-off charge of £9.7m to fix the roof on a building Costain helped to build in 2006. The sub-contractor on the project, who undertook the installation of the roof, would have been contractually liable for the remedial works but went into administration in November 2017.
Chief executive officer Alex Vaughan said he was "pleased" the group has continued to secure significant new work during the first half.
"We therefore remain on track to deliver our revised expectations for the current year and growth in 2020," he said.
"We recently launched our 'Leading Edge' strategy for the development of the business which aims to accelerate the deployment of higher margin activities and deliver a blended divisional margin range of 6%-7% over the medium term. The group's structure has also been reorganised to better align it to our clients and the markets in which we operate.
"With this enhanced strategy and strong market backdrop, underpinned by a robust balance sheet, we are focused on significantly enhancing the value of Costain."
Costain said in June that underlying operating profit for the full year was expected to be between £38m and £42m.
At 0905 BST, the shares were up 11% at 160.85p.
Costain (COST)21 May 2024 14:06