Thames Water have always been a difficult client to work for often seeking 60 day payment terms and difficulties negotiating variances and getting order values increased. |
Agree. Current share price is first base.Been in this for nearly 5 years. Stayed true to my convictions and at real lows further averaged down.Feel more to come over next couple of years and expect 130 to 150p to materialize sooner rather than later. |
When they do work for Thames they get paid as they go along. That's what a quantity surveyor will do for them.They will also have insurance for a set amount in case any client goes into administration. And they will have preset amounts for each client.We do this where I work and you invoice as you go along and don't let outstanding amounts exceed your insurance cover. |
thames will be nationalised - very different. |
Best ring AV soonest in case he's not noticed.... |
Thames Water may well go bust next year. If that happens Costain is unlikely to get paid for any contract work they do for them. They need to be very careful when dealing with this company. |
Rachel Reeves has already stated she wants more infrastructure work.
Labour only have one strategy....... build, build, build.
Costain well placed to grow. |
I would guess rail and highways downturn and move towards more consultancy work. HS2 will drop as well next year so would expect turnover to fall in 2025 but may be wrong. |
Thanks Pinemartin |
They've got much more selective about the jobs they pursue. Prioritisation of higher margin contracts. It's the old adage - revenue is vanity, profit is sanity, cash is king. |
Looked through lat 2 reports but cannot see, can anyone tell me why the FY revenue between 2022 and 2023 dropped by 6%?
Can only see this... a reduction in volumes due to the rephasing and rescoping of certain projects in the division.
Thanks |
Good read. Looks primed for another leg up IMO. |
 Costain Group – Are These Shares Significantly Undervalued?
“We shape, create and deliver pioneering solutions that transform the performance of the infrastructure ecosystem across the UK’s energy, water, transportation and defence markets.”
That is the claim by the 150 year-old Costain Group (LON:COST) – which is a business that I continue to rate as significantly undervalued.
Its shares, now 84.20p, could double and still look cheap.
Costain brings together a unique mix of experts to transform the performance of infrastructure that connects, protects and powers people’s lives.
The Business
The group operates in six main sectors – Rail, Integrated Transport, Road, Water, Energy, and Defence and Nuclear Energy.
Rail – it delivers end-to-end asset lifecycle solutions across the entire railway, from major station projects to multi-disciplinary rail projects.
Integrated Transport – it works with diverse customers spanning Aviation, Light Rail and Place to transform organisational performance and accelerate the transition to net zero.
Road – it is a leading provider of end-to-end highway services, delivering technology-led solutions for its customers.
Water – it is a leading provider of engineering solutions to UK water utility companies across the asset lifecycle.
Energy – it supports the decarbonisation of the UK’s energy infrastructure by improving existing asset efficiency and life extension while leading the transition to a sustainable clean, green energy future.
Defence and Nuclear Energy – it supports the strategic defence capabilities and energy resilience that protect and power the UK, its people, values, and interests.
Recent Comment
The AGM Trading Update issued on 16th May saw the company confirm that trading in the first four months of the current year were in line with expectations and that the group continued to have a high-quality forward work position that aligns with its strategic plans for both the Transportation and Natural Resources divisions.
It is in line to deliver its margin targets of an adjusted operating margin run-rate of 3.5% during the course of 2024 and 4.5% during the course of 2025.
“While the Board is mindful of the macro-economic backdrop, it remains confident in the group’s strategy and medium to long-term prospects.”
Brokers’ Views
Analysts Joe Brent, Alex O’Hanlon and Sanjay Vidyarthi at Liberum Capital have a 100p a share Price Objective on their Buy recommendation.
Ahead of the First Half Results to end June being announced on Wednesday 21st August, the brokers have estimates for the current full year to show £1,219m sales, £46.5m profits, 12.3p earnings and paying a 1.2p per share dividend.
For next year they see £1,216m revenues, £52.1m profits, 13.8p earnings and a 1.4p dividend.
Recent Order Book intake is looking very positive, with hopes of better margins.
My View
I am impressed that Joe Brent is so convinced about this group’s value that he predicts that the company will be showing a 20p a share earnings figure in due course.
I have been a long-term fan of this group and I continue to rate its potential very highly.
Importantly, I also like that its balance sheet is predicted to have £140m net cash within its coffers by the end of this year – which compares with its current market capitalisation of £235m, with its shares trading at around 84.20p each.
It may well take a very long time to achieve my first pre-Brexit, pre-Covid Target Price, even so these shares are destined to rise substantially, in my view, over the next couple of year or so – they remain a Very Strong Hold. |
I always find Blackhorse to be an inverse indicator of reality. For some bizarre reason his crazy ramblings seem to have a positive imact on the shares he talks about! I see it as a positive thing that he's appeared! Long love BH! He's inversely correlated to positive share prive movement! Viva le Blackhorse! |
Oh dear, bellend blackhorse has appeared. |
Switched to RNK [better change to capital gains] 4 brokers issued strong BUY |
M Group - an infrastructure contractor with 2bn turnover and 6bn order book - just got bought by PE for over £1bn. Interesting comp for Costain. I have asked around for more details. |
I understand your scepticism Catabrit, but I'm not talking about jobs making 2%. I've been heavily involved in both parts of various contracts which made 30% or more. My point always was that if you lack the expertise to price and run appropriate types of big one offs they are dangerous, but if you stick to areas were you have the expertise they are worthwhile.
Incidentally, the other day I posted that the most extreme incompetence that I had ever seen in major civils was a project with Trafalgar House, who were subsequently taken over by a Norwegian company who were saved from implementing the project by political turbulence, and then sold on the construction division a couple of years later to Skanska. But that was many years ago. |
The problem with moving away from the large one off projects is that you miss out on the big winners which with the right expertise in tender selection and preparation followed by good site expertise can be very lucrative. The reluctance to tender for such projects is perhaps a reflection of that lack of expertise making it safer to avoid pricing contracts with badly understood technical requirements or contract terms.
Aren't Alstom train builders rather than anything to do with civil engineering? |
The new MD of Transport apparently has an excellent track record in rail (7-yrs at Alstom prior to Skanska) and is widely liked and respected. |
They mostly tend to be frameworks and if you don't get all of the variations signed off you can come unstuck.
Let's hope commercial teams are on the ball.
But helps order book but quiet on Rail still hopefully after election might be some more investment. |
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