Costain Group PLC New Payment Plan with Pension Scheme Trustee (4533E)

TIDMCOST

RNS Number : 4533E

Costain Group PLC

30 June 2023

THIS ANNOUNCEMENT CONTAINS INFORMATION WITHIN THE MEANING OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

Costain Group PLC

30 June 2023

Costain Agrees New Payment Plan With Pension Scheme Trustee

Costain Group PLC ("Costain" or the "Group") announces that agreement has been reached with the Trustee of the Company's defined benefit pension scheme ("Costain Pension Scheme" or "Scheme") on 31 March 2022 triennial actuarial funding valuation and ongoing contributions to the Scheme.

The new contribution plan from the Group to the Costain Pension Scheme runs from 1 July 2023 to 31 March 2027 and is for a payment of GBP3.3m per year, payable in pro rata monthly instalments, which will increase in line with inflation (CPI) each 1 April. This replaces the previous contribution plan to the Scheme, which from April 2023 had increased to an annual payment of GBP11.98m paid in monthly instalments.

As a result of the new contribution plan, the full year 2023 pension contribution payment by the Group will total GBP7.4m, and payments for 2024 and thereafter will be GBP3.3m annually, plus inflationary increases as outlined above.

The Scheme funding position on a Technical Provisions basis as at 31 March 2022 was a deficit of GBP25.1m (a funding level of around 97%).

An assessment of the Scheme funding position will be carried out each 31 March and, if the funding level (on a Technical Provisions basis) is more than 101%, contributions will stop from the following 1 July to 30 June. If the funding level falls below 101% at the following 31 March, contributions will resume for the next year starting 1 July to 30 June at the agreed new level.

In addition to the contributions set out above, the "dividend parity" arrangement will continue until 31 March 2027. Under this arrangement, an additional matching contribution (the excess of the total dividend above the Scheme contribution) to the Costain Pension Scheme will be made when the total of the interim and final dividends for a financial year paid to the shareholders of Costain Group PLC are greater than the contributions paid into the Scheme in the previous Scheme financial year, which runs from 1 April to 31 March. If the funding level is above 101% as at 31 March, then no contributions will be payable in respect of dividend parity for the following year.

Alex Vaughan, Chief Executive Officer, commented:

"This is really positive news for all Costain's stakeholders. It ensures we can meet the promises we have made to our defined benefit pension holders, while delivering further cash to the business and increasing the future financial and operational options for Costain. "

As at 31 December 2022, the Costain Pension Scheme surplus in accordance with IAS 19 was GBP60.2m (HY22: GBP86.2m surplus, FY21: GBP67.1m surplus).

This announcement contains information that qualifies as inside information. The person responsible for the release of this announcement on behalf of Costain is Helen Willis, Chief Financial Officer.

Enquiries

 
 Investors and analysts         [e-mail] 
  Paul Sharma, Costain           [phone] 
  Financial media - Headland    [e-mail] 
  Andy Rivett-Carnac            [phone] 
  Charlie Twigg                 [phone] 
 

Notes to editors

Costain helps to improve people's lives by creating connected, sustainable infrastructure that enables people and the planet to thrive. We shape, create and deliver pioneering solutions that transform the performance of the infrastructure ecosystem across the UK's transport, energy, water, and defence markets.

We are organised around our customers anticipating and solving their challenges and helping to improve performance. By bringing together our unique mix of construction, consulting and digital experts we engineer and deliver sustainable, efficient and practical solutions.

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June 30, 2023 02:00 ET (06:00 GMT)