10th Jan 2008 07:00
Costain Group PLC10 January 2008 Costain Group PLC("Costain" or the "Group") Pre-close Trading Update & Board Changes PRE-CLOSE TRADING UPDATE Ahead of the announcement of the Group's results for the year ended 31 December2007, Costain is providing the following update on trading. Key points: • Following a significant recovery in profitability during the year, results overall for the period are anticipated to be in line with expectations. • The Group's Civil Engineering division, which accounts for approximately 80% of the forward order book, continued to build on the strong performance seen in the first half. In December, in line with its strategy of actively trading its PFI portfolio tore-invest in the bidding for new projects, the Group sold its 50% investment inthe 30-year Sirhowy Enterprise Way concession in Wales to John Laing, whichalready owned the remaining 50%. • The Building division continued to make steady progress throughout the year following the remedial actions put in place by management, including a re-alignment into key sectors. • The Group's oil & gas division, COGAP, performed ahead of expectations as a result of a refocused strategy, a good order book and much improved productivity levels. • The Group continued to manage out certain legacy contracts, in particular at Costa Azul and Pemex, where the projects are nearing completion and commercial discussions are ongoing regarding the final handover of both contracts. • The Group's property development division in Southern Spain completed a number of small transactions although a major land sale expected during the second half has been delayed and, consequently, the result for the division was below expectations. The Board remains confident in the medium- to longer-term outlook for the division and this view has been reinforced during the year by securing the marina development project near Gibraltar in the second half of the period. • The forward order book remained satisfactory and the Group has a growing level of preferred bidder positions, acquired as the Group continued to build on its position in key market sectors. Costain has recently been appointed as preferred contractor for the SPV on theGreater Manchester Waste Disposal Authority's PFI Contract. The capital worksprogramme valued in the region of £300 million involves constructing 45facilities on 28 sites with completion in 2011. The Group has been awarded anadvance works order valued at £7 million to progress detailed design andcommence early mobilisation. Costain has also been appointed as preferred bidder to build a new campus forthe University of Worcester worth £70m. Construction is expected to begin in thesummer with a completion date of August 2009. • In view of the anticipated outturn for the year, the Board reaffirms its intention to resume dividend payments and expects to recommend a dividend of 0.5p per share in respect of the year ended 31 December 2007. Andrew Wyllie, Chief Executive, commented: "We have delivered a strong recovery during the year and expect to announceresults in line with expectations. Looking to 2008, the recent successfulequity fund raising, combined with extended and enhanced banking and bondingfacilities, leaves the Group well placed to capitalise on the many opportunitiesavailable to it in its chosen market sectors." BOARD CHANGES Costain announces that James Morley (58) has been appointed as a non-executiveDirector of the Group with immediate effect. Mr Morley is also appointedChairman of the Audit Committee in succession to David Allvey, who becameChairman of the Group on 1 January 2008. Mr Morley has over thirty years of senior finance and operational experience ina diverse career spanning a range of industries and businesses including PrimaryInsurance Group (Chief Operating Officer); Cox Insurance Holdings (Group FinanceDirector); Arjo Wiggins Appleton (Group Finance Director); Guardian RoyalExchange (Group Executive Director, Finance); and Avis Europe Plc (latterly asDeputy Chief Executive and Chief Financial Officer). Mr Morley is also a non-executive Director of a number of companies includingThe Innovation Group Plc, WS Atkins Plc and Bankers Investment Trust. There areno details to report in respect of Listing Rule 9.6.13 (2) to (6). Additionally, with immediate effect, Mr John Bryant will become the Group'sfirst Senior Independent Director and consequently, Mr Mike Alexander, whojoined Costain as a non-executive Director in July 2007, will become Chairman ofthe Remuneration Committee. David Allvey, Chairman, commented: "We are delighted to welcome James to the Board. He has a wealth of experienceacquired over a highly successful career and we will benefit from his insights.His appointment, coupled with our other changes, will ensure the Board iswell-equipped as the Group moves into its next stage of development." FULL YEAR RESULTS The full-year results will be announced on Wednesday 12 March 2008. Apresentation for analysts will take place at the offices of College Hill, TheRegistry, 3 Royal Mint Court, London, EC3N 4QN at 09.30 that morning. 10 January 2008 ENQUIRIES:Costain Group PLC Tel: 01628 842 444Andrew Wyllie, Chief ExecutiveTony Bickerstaff, Finance DirectorGraham Read, Public Relations College Hill Tel: 020 7457 2020Mark GarrawayMatthew Gregorowski This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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