Full-year profits at Costain (COST) are likely to be ahead of earlier forecasts, thanks to a £9.1m profit realised on the sale of a minority shareholding in three joint ventures to Severn Trent. The sale forms part of the construction and support services group's continuing disposal of its PFI equity portfolio, and in light of the latest sale, analysts at Investec have upgraded 2013 estimates for pre-tax profits from £22.7m to £32.2m and EPS from 26.4p to 37.5p.
And despite a move to securing new work on a more cash-consuming target-cost-cost-reimbursable form of contract, Investec still expects year-end net cash to improve to £44.4m. Costain also confirmed that the £3bn order book, up 25 per cent from a year earlier, comprised over 90 per cent repeat orders, while over £750m of work has been secured for the coming year. On top of this, the group has a strong preferred bidder position of a further £400m.
