And I got my Divi parity suspended and a buy back. I must have been good this year, lol. |
Hello 100p :) |
"We are performing strongly and are progressing with our strategic priorities in our chosen growth markets, including broadening our customer and service mix. In the first half we have delivered a further significant increase in operating profit together with a sharp growth in earnings per share. The net cash balance grew to £166m, adjusted operating margin increased as expected, and due to the quality of our earnings, we remain on track to deliver our margin targets during FY 24 and FY 25. |
 21 AUGUST 2024
COSTAIN GROUP PLC
("Costain", the "Group", or the "Company")
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024 ("H1 24")
Continued strong financial performance, with a £4.3bn forward work position.
· Revenue of £639.3m (H1 23: £664.4m) reflecting growth in Natural Resources, and as expected, a small reduction in Transportation.
· Adjusted operating profit1 up 8.7% to £16.3m (H1 23: £15.0m) reflecting an increased operating margin in Transportation and increasing volumes and margin in Natural Resources. Reported operating profit was £13.9m (H1 23: £7.6m).
· On course to meet margin targets of 3.5% and 4.5% during FY 24 and FY 25 respectively. Adjusted operating margin1 increase of 20bps to 2.5% (H1 23: 2.3%), with margin growth in both divisions.
· Adjusted EPS up 27.3% to 5.6p (H1 23: 4.4p) driven by interest earned on stronger net cash position and adjusted operating profit increase. Reported EPS was 5.0p (H1 23: 1.9p).
· Increased high quality forward work2 position of £4.3bn of more than three times FY 23 revenue (FY 23: £3.9bn; H1 23: £4.0bn), with contract wins across all sectors and significant growth in Water. At least a further £500m of Water contracts won post half year.
· Interim dividend payment of 0.4p (H1 23: 0.4p), in line with H1 23.
· Strong balance sheet and as separately announced today, a £10m on-market share buyback launched |
See you all tomorrow. GLA! |
Decent chart on this, nice long 'bowl', break out today on decent enough volume. Good recovery stock and fundamentals moving in the right direction. |
--->ALL
A write up today in UK INvestor Magazine by Mark Watson Mitchell....
hxxps://ukinvestormagazine.co.uk/costain-group-creating-a-sustainable-future-is-good-business-for-245m-valued-group-with-169m-cash-in-the-bank/?mc_cid=81f5b6fd8f&mc_eid=cde7b89608
Costain Group – Creating A Sustainable Future Is Good Business For £245m Valued Group With £169m Cash In The Bank
By Mark Watson-Mitchell
20/08/2024
The £245m capitalised Costain Group (LON:COST) is due to announce its Interim Results tomorrow morning.
With some £700bn of infrastructure investment expected over next decade the group will continue its role as a major player in the sector.
It looks to shape, create and deliver pioneering solutions that transform the performance of the infrastructure ecosystem across the UK’s energy, water, transportation and defence markets.
Employing over 3,200 people across its business, the group engineers and delivers sustainable, efficient and practical solutions, utilising its unique mix of construction, consulting and digital experts.
Management Targets
Last year it reported a 10.5% increase in adjusted operating profits and strong net free cash flow.
Looking to its revenue and operating profit growth, it aims at an adjusted operating profit margin run rate of 3.5% during 2024, rising to 4.5% during 2025, and in excess of 5.0% thereafter.
Chair Kate Rock stated that:
“We are delivering well on our strategic objectives with an increase in our adjusted operating profit and margin.
We continue to build a pipeline of future opportunities for 2025 and beyond.”
Group Divisions
Transportation delivered a resilient performance in 2023 with rephasing and rescoping of contracts during the year – £943m sales.
Natural Resources saw revenue growth in the year together with positive margin improvement – £389m sales.
Recent Trading Update
In its mid-May AGM Trading Update the group noted that from the start of the year its trading for the period was in line with Board 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.
The average weekly net cash position from 1st January to 30th April 2024 was £168.8m (of which £60.4m was held in joint ventures).
The average weekly net cash position for the same period last year was £122.9m (of which £57.2m was held in joint ventures).
While the Board is mindful of the macro-economic backdrop, the group stated that it remained confident in its strategy and medium-to-long-term prospects.
Recent Contract Win
Late last week the group announced that its CMDP+ joint venture with MWH Treatment has been selected by Southern Water to shape and deliver its next strategic asset upgrade programme.
The award is for an initial seven-year term worth at least £500m to Costain, with an option to extend by up to five years.
The framework will deliver upgrades to water and wastewater assets, including treatment sites, pumping stations and reservoirs,
CEO Alex Vaughan stated that:
“This AMP8 announcement builds on our growing positions with the leading water companies as they prepare for a nationally important period of record investment.
This framework marks three decades of delivering industry leading essential solutions for Southern Water.
Through our successful joint venture with MWH Treatment, we will upgrade water and wastewater services for Southern Water and its customers, safeguarding the environment, and securing water supplies across the region; as well as creating new jobs and added social value.”
This contract extension adds to Costain’s growing positions with leading water companies, which include Anglian Water, Northumbrian Water Group, Severn Trent Water, Thames Water, United Utilities and Yorkshire Water.
The Equity
There are some 278.5m shares in issue.
The larger holders include ASGC Construction (14.96%), JO Hambro Capital Management (9.79%), Ennismore Fund Management (6.69%), Gresham House Asset Management (5.39%), Hargreaves Lansdown Asset Management (3.37%), Artemis Investment Management (3.04%), FIL Investment Advisors (UK) (2.85%), KBI Global Investors (2.61%), and Amundi Asset Management SA (2.03%).
Analyst View
There are four analysts following the company, rating the shares as a Buy, with an average consensus Price Objective of 95p, the highest view being 104p, and 80p for the lowest.
At Panmure Liberum, analyst Joe Brent, with colleagues Alex O’Hanlon and Sanjay Vidyarthi, rates the shares as a Buy looking for 100p a share as the Price Objective.
Their current year estimates to end-December are for £1,219m (£1,332m) sales, with pre-tax profits of £46.5m (£44.2m), generating earnings of 12.3p (11.9p) and maintaining its 1.2p dividend per share.
For 2025 the broker looks for £1,216m sales, £52.1m profits, 13.8p earnings and a 1.4p dividend.
Going forward into 2026 estimates are for sales of £1,243m, £56.7m profits, 14.9p earnings and a 1.5p dividend.
In My View
Costain Group shares, at 89p, are far too cheap considering that they are on just 7.24 times current year price-to-earnings, while the group should end the year with around £164m of cash on its balance sheet, compared to its current £245m capitalisation.
Regards,
TC! |
The 90p was a resistance level back in 2020. Next pause on the chart £2! |
Yes, that was what I was thinking Roguemale1. The future workload looks reliably profitable with the announced framework deals etc, and this year Perhaps profits will reach £35m which would make a doubling of dividend and the consequent doubling of payment into the pension scheme cost a total of about £13m?, and leave a reduced "compulsory" pension contribution for the next three years regardless of the pension fund's valuation. Perhaps they could get rid of the restriction faster than via the agreed timetable. |
Well I would have thought that with HS2 rinsing us all he would have enough extra over bunce to be able to sort it but lets see. Fingers crossed for tomorrow.
Meanwhile James the Engineer is free of Keltbray and piloting a new ship....all to play for IMHO. |
I am enjoying the share price but, like you, Roguemale1, I think the share price is capped because the deal with the pension fund means a low dividend/yield until that deal changes. That may require a bidder. |
92 on the UT...nice! |
Seems to be some strength in share price leading up to results on Wednesday |
The award is for an initial seven-year term worth at least £500m to Costain, with an option to extend by up to five years.Quite a substantial amount that is why.Think they want to create some momentum going into results. Fact that they are holding first investors presentation day after results expect these to be good and start of next leg up.Let's see next. Not ling to wait.Will we finally get about 100p. |
I don't understand why they suddenly decided to start releasing news of a contract so close to the HY??? |
Bullish if closes above 89p |
MCap peaked 2017 464m, 178m nett cash. ie about 160 in todays price.
Around the 140 mark average for the last 3 decent years.
Broadly most metrics are likely to be back where they were this year, with the exception of the divi which is tied to the pension position.
I think until something is said about that we are capped... imho. |
Nothing goes up in a straight line, but it is still onwards and upwards for the share price. Prospects continue to improve. |
As a very rough calculation, the contract probably adds over 3m per year profit to the bottom line for 7 years.
Stripping the large cash position out (some of the cash is held in escrow), Costain's business is valued at just north of c120m.
Would think as a recovery situation it's worth a lot more than this. |
Surely were on for a material updating on the years forecast, this should be trading 120+ |
Costain and MWH Treatment joint venture CMDP+ wins AMP8 framework with Southern Water
Win marks Costain's latest major AMP8 award for 2024
Costain Group PLC ("Costain") announces that its CMDP+ joint venture with MWH Treatment has been selected by Southern Water to shape and deliver its next strategic asset upgrade programme.
The award is for an initial seven-year term worth at least £500m to Costain, with an option to extend by up to five years.
CMDP+ has successfully secured a place on two Lots of the new Strategic Delivery Partner framework, and the joint venture continues the long-standing relationship between Costain, MWH Treatment and Southern Water. The framework will deliver upgrades to water and wastewater assets, including treatment sites, pumping stations and reservoirs, during Asset Management Period 8 (AMP8) and beyond. Southern Water expects that its AMP8 programme, which runs from 2025 to 2030, will be the largest it has ever undertaken.
Costain has worked successfully with Southern Water through every asset management investment period since 2000.
Alex Vaughan, CEO, Costain, commented: "This AMP8 announcement builds on our growing positions with the leading water companies as they prepare for a nationally important period of record investment.
"This framework marks three decades of delivering industry leading essential solutions for Southern Water. Through our successful joint venture with MWH Treatment, we will upgrade water and wastewater services for Southern Water and its customers, safeguarding the environment, and securing water supplies across the region; as well as creating new jobs and added social value."
Enquiries: |
Interesting price action today |
Meetings for analysts are on the same day as results, but meetings with retail investors through InvestorMeet are often a day later - or even a few days. |
Also, note that there is a H1 Results Investors Update meeting on 22nd Aug 2024 at 10:00am BST, which is interesting that it is one day after the results are announced according to Costain's investor relations Web site. Normally same day. |
We have Costain's H1 results on Wed 21st August. It will be interesting to see progress and forward looking statements. 4 analysts covering.High 104p, Average 94.8p, be interesting to see whether after H1 results enough to lift us permanently into the 90s and beyond, and start the rerating process. |
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