6th Mar 2019 10:01
LONDON (Alliance News) - Infrastructure services firm Costain Group PLC hiked its 2018 dividend Wednesday after underlying profit rose on higher margins, as it announced its long-standing boss will leave in May to be replaced by an insider.
In 2018, pretax profit narrowed 3.8% to GBP40.2 million from GBP41.8 million the year prior. This was after revenue fell 13% to GBP1.46 billion from GBP1.68 billion the year before.
Revenue performance fell as a result of the "lower level of capital project activity in the year" which was in line with its strategic change in "mix of activities", Costain explained.
Profit performance was also held back by GBP9.5 million in exceptional charges, chiefly related to one-off pension costs and amortisation of acquired intangible assets. In 2017, exceptional costs stood at GBP2.0 million.
Underlying pretax profit - excluding exceptional items - widened 13% to GBP49.7 million from GBP43.8 million the year prior.
"This has been another strong performance for Costain, with further growth in underlying profit at enhanced margins," Costain Chair Paul Golby said. "We also finished the year with a record higher-quality order book of GBP4.2 billion."
Costain proposed a 10.0 pence per share final dividend, up 8.1% from 9.25p the year prior. For the full year, the dividend rose 8.2% to 15.15p from 14.0p the year before.
"This success has been driven by providing smart infrastructure solutions that expertly integrate consultancy, complex delivery, technology and asset optimisation services," Golby added. "Costain is at the forefront of the rapidly-evolving UK infrastructure market, working with our clients on a long-term, strategic basis to deliver their progressively larger and more complex investment programmes."
"This increasingly differentiated strategic positioning underpins our ambition for continued growth," Golby continued. "With a clear purpose, strategy and record order book, I look forward to reporting on future progress."
Chief Executive Officer Andrew Wyllie will retire as Costain boss from its annual general meeting on May 7, leaving the company entirely on September 6. Wyllie - boss at Costain for 14 years - is retiring in order to pursue an "non-executive career."
"I would like to thank Andrew for everything that he has done for the business and to wish him and his family well for the future," Golby said. "Andrew can feel extremely proud of what he has achieved at Costain. He leaves the group in good health, the result of the growth strategy which he and his colleagues have been implementing for the last fourteen years."
Wyllie will be replaced at the helm by Costain Natural Resources Managing Director Alex Vaughan. Vaughan - a chartered quantity surveyor - has been at the firm since 1992.
"We are delighted that Alex will be taking over," Golby continued. "He has played a major role in the development of the group and the implementation of its strategy, and has the expertise and ambition to deliver the future growth of the business."
Shares in Costain were 4.5% lower at 379.50 pence on Wednesday.
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