Increased spending on the UK's road and rail networks was good news for integrated construction and services group Costain (COST), as evidenced by 16 per cent growth in underlying operating profit to £33.2m. Securing more work also helped to push the order book up 11 per cent to a record £3.9bn.
Over £1.1bn of revenue has already been secured for the current year, and there's another £2.8bn secured for 2017 and beyond. Costain is benefiting from the 'one-stop-shop' approach increasingly demanded by its customers, whereby the group can take a contract all the way through from planning and logistics to completion. It's something that customers obviously like, and 90 per cent of business secured is repeat business. The quality of the order book is also underpinned by a majority of contracts being secured on a target cost, cost reimbursable basis, whereby savings on target costs are shared between Costain and the customer, while Costain is reimbursed on a monthly basis for the previous month's costs.