30th Jun 2006 07:02
Costain Group PLC30 June 2006 Costain Group PLC("Costain" or the "Group") Pre-close trading update Ahead of the announcement, on Wednesday 30th August 2006, of interim results forthe six months ended 30 June 2006 Costain is issuing a trading update. In line with the update given at the Annual General Meeting in April, the Groupcontinues to benefit from high levels of customer spend in its targeted markets. As a result, turnover growth in the first half was very strong against thesame period last year. Over the same period, the Group's forward order bookincreased to a record mid-year figure of £1.9 billion, up 19% on the comparablefigure. In March, the Group unveiled its new strategy - 'Being Number One' - with itsemphasis on establishing market leading positions in selected sectors. Whilstthe core activities of the Group have performed well, two smaller divisions,International and COGAP, the Group's oil & gas division, which do not enjoystrong market positions, have continued to struggle. It has therefore been concluded, that whilst international opportunities will bepursued by each of the Group's core divisions, providing they complement theGroup's strategy of focussing on key targeted sectors, the InternationalDivision will be closed with immediate effect. Several of the existingcontracts will be reallocated to the Group's core divisions, with the balance tobe worked through, and a number of overseas offices will be closed. The executive management team is also taking action to ensure a greater degreeof focus is brought to COGAP. The division needs to deliver improvedperformance. Progress will be closely monitored and further appropriate actionwill be taken if required. The Board is confident that the performance of the Group's core activities willbe in line with its expectations both at the half year and for the year as awhole. The interim results will, however, include provisions in respect of themanagement actions associated with the International Division outlined above.Whilst the provisions continue to be reviewed in detail, and will be confirmedin the interim results announcement, it is expected that they will be in a rangeof £12 million to £14 million, of which only circa. £3 million will have afuture cash impact. The strong performance of the Group's core activities, and the rapid remedialaction being taken in respect of underperforming operations, should ensure thatthe Board is able to consider, subject to meeting the necessary conditions, aresumption of a final dividend payment in respect of 2006. Andrew Wyllie, Chief Executive, commented: "Costain has made progress in the first half and our core businesses areperforming strongly. This is reflected in the excellent advance in the forwardorder book. We are resolute in achieving our strategic objectives and will continue to take decisive action against underperformance." 30 June 2006 ENQUIRIES:Costain Group PLC Tel: 01628 842 444Andrew Wyllie, Chief ExecutiveTony Bickerstaff, Finance Director 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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