RE: Q29 Jun 2021 09:43
Hi Slave, you beat me to it.
There are 3 situations basically.
1. Jobs that were won a good while ago and are probably already on site -orders will probably have been priced fixed. As long as its laid off all the way down the chain, all good. No risk.
2. Jobs closing now-Currently very difficult to fix major materials eg the big numbers concrete and rebar, Costain and/or subcontractors would decline to fix and client will have to cope with a variable materials cost based on some benchmark price in the bid. No risk.
3. There may be the odd job fallen between where the job was won fixed, and the materials price increase started before the job was all procured (there is always a lag). Might be some pain for someone there. As Slave says most subcontractors have larger buying departments than Costain now, and some of them wont fancy taking a big hit....
I think the largest potential issue is that irrespective of prices, and concrete and rebar are hard to fix at the moment, the lead times and volume restriction that are now coming on will delay projects, and there is a cost to this .
One to watch I think. But the gravy train that is HS2 will be fine whatever, so not too bad all in all.