Costain’s operating profit was up 38 per cent to £24.1m while the firm’s order book also grew to £2.5bn at the end of the year.
The full year results to December 31 2011, published today, also indicate that turnover dipped to £986.3m from £1,022m as the firm focused on higher margin work.
Pre-tax profit fell to £23.9m from £27.9m but last year’s numbers were boosted by a one-off profit of £11m from the sale of PFI interests.
As a result of the higher margin work, Costain is looking to make more acquisitions this year after building up £140.1m of cash in the bank to fund its expansion programme.
Chairman David Allvey said:
“The ongoing drive, both organically and by acquisition, to broaden our services across engineering consultancy, construction, and operations and maintenance will remain a key priority in 2012.”
Chief executive Andrew Wyllie said the firm’s strategy of targeting the biggest clients in the transport, energy, water and waste sectors is paying-off.
“We are developing the skills, capabilities and service offering necessary to meet the changing needs of our major customers.
“They are increasingly expecting Tier One suppliers to provide broad and bespoke solutions to their specific requirements by delivering an innovative service across engineering consultancy, construction, and operations and maintenance, through larger and longer-term bundled contracts.
“These skills enable us to engineer solutions to meet some of the country’s most complex and pressing national needs.”
A quarter of Costain’s work currently comes from support services and that percentage is expected to grow.
Wyllie continued:
“Costain’s strategy is to focus on securing longer term and higher margin contracts from major blue chip customers; and whilst this approach has led to a decrease in revenue in 2011, our operating profit and quality of earnings have improved significantly.”
Due to the strong performance of the company, dividend pay-outs to shareholders have increased by 8 per cent.
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