Costain Share Discussion Threads

[skinny] 17/8/2020 08:24

imastu pidgitaswell -

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[imastu pidgitaswell] 17/8/2020 07:51

Nope.

🤓

If you can do a cost one I’ll stick it in the header


Is that actually a world first, buywell making a useful contribution to a thread?

[buywell3] 17/8/2020 07:49

Skinny
12 Aug '20 - 16:27 - 46 of 47

Not COST chart is it

[aquaesulis01] 17/8/2020 07:46

Summary from the market

[imastu pidgitaswell] 17/8/2020 07:45

Mmmmmm.

Understand the reason for the delay so as to incorporate the results of the A465 contract but still frustrating.

Still no real indication of the profitability going forward other than there is a very large 4 billion revenue book and they will not do any more of these balls up legacy contracts like the Peterborough Huntington one which will result in another one time hit over 40 million quid to the results (although to be fair most of the cash for that has already been spent and then it is quite possible that it will all be recovered through the arbitration process so not necessarily a permanent hit.)

It’s only when we get to next year that we will see a clean set of trading results for this company with normalised margins, And have a better indication of what the share price should actually be - I still say 150p plus.

More positively, cash extremely good - just a matter of waiting.

[skinny] 17/8/2020 07:02

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Trading update


Costain's performance has been resilient in the first half through the COVID-19 pandemic and the Company has made strong progress with its strategic objectives. A ll contracts are now operational with the necessary safety measures in place to protect our people.

Overall, we expect to report an operating profit, before the A465 and Peterborough & Huntingdon contracts, of GBP5.7 million for the first half, with both our trading divisions, Transportation and Natural Resources, profitable despite the impact of COVID-19.

The outlook in our core infrastructure markets remains positive with high levels of activity across our teams to secure new contract opportunities. Over GBP2 billion of contracts and frameworks were confirmed and secured in the first half comprising a greater proportion of consultancy and digital integrated services, in line with our strategic focus. Our order book stood at GBP4.2 billion at the period end and, in addition, we now have over GBP1 billion of work on our frameworks. The order book includes GBP0.9 billion of secured revenue for 2021.

Following our successful GBP100 million capital raise in May, we have a strong balance sheet, with net cash of GBP140.9 million as at 30 June 2020 (2019: GBP40.8 million), comprising GBP117.8 million of cash and GBP85.1 million share of cash in joint operations, less GBP62.0 million of drawn debt . Our strengthened balance sheet allows us to capitalise on further opportunities in the growing infrastructure market.

On 6 August 2020, the Group completed the sale of its 624-berth marina concession for a cash consideration of EUR4.75 million. The disposal completes the Group's strategy to divest its non-core business assets in Spain. The loss on the sale of GBP0.6 million will be included in the income statement in the first half of the year.

Revised date for publication of half year results

Costain expects the latest arbitration decision in relation to the A465 Heads of the Valley road contract ("A465 contract") to be delivered shortly. The arbitration decision has recently been accelerated and is expected by no later than 9th September 2020. Although our view on the outcome of the arbitration is unchanged, the decision will enable Costain to more accurately report on the financial position of the contract. Accordingly, the Group will now announce its half year results on Monday 14th September, once the arbitration outcome is received.

Update on accounting treatment for the Peterborough & Huntingdon contract ("P&H contract")

As announced on 29 June 2020, agreement was reached with National Grid to cease work on the P&H contract with demobilisation of activity to take place by 31 August 2020. The termination agreement incorporates a legal process over the next 18 months to agree up to GBP80 million of identified compensation events, recover costs to date and eliminate a potential liability to National Grid for completing the works.

The Group has GBP42.0 million of P&H contract asset (i.e. work undertaken but not yet paid) as at 30 June 2020 which will increase to GBP49.3 million at the end of our works, to be recovered through the resolution process. As previously announced and supported by expert advice, the Group continues to believe that it has a strong entitlement to recover this sum which is subject to successful pursuit through adjudication and potentially litigation. Reflecting the revised commercial resolution process incorporated in the termination agreement and in accordance with IFRS15, there is the requirement to take a one-off charge to the 2020 interim results income statement of GBP49.3 million to adjust the revenue recognised on the P&H contract to the level of cash received to date. The majority of the cash impact of this charge has been incurred in the first half of 2020, with GBP15 million of cash out remaining in order to complete our works.

In addition to working to resolve the issues with the A465 contract and the P&H contract, the Group has taken actions to address the type of risk arising from these contracts, including no longer pursuing Energy EPC contracts, focusing on long term investment programmes - not one off capital projects, and enhancing the strength of its overall contract management under the new Operational Excellence programme which is now in place.

[skinny] 12/8/2020 16:27

:-)

No you're doing a good job - at least its up to date - notwithstanding what may have happened to washbrook.

A couple of useful (or not) links you may want to (or not) add to the header.





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[imastu pidgitaswell] 12/8/2020 16:13

As in, here...

:-)

[imastu pidgitaswell] 12/8/2020 16:12

But if you keep posting here (as I am now doing), it keeps bringing this old thread back up.

Anyone familiar with the Heisenberg Uncertainty Principle will understand - sort of...

:-)


Anyone reading this - go here instead:

[skinny] 12/8/2020 15:52

He hasn't posted since 2010.

[owenski] 12/8/2020 15:02

Lot of old stuff in the header here and from the age of 'Washbrook' I'm guessing that he sadly may no longer be around?

[owenski] 12/8/2020 15:01

Maybe your thread is better IMA as it's more modern. I just posted on what came up, be good to try and keep it to one thread either way :-)

[imastu pidgitaswell] 12/8/2020 14:04

This intern charged with selling at 60p for somebody went off for a lunch break and got caught out - but quickly stamped on. Hope they don't get in trouble for it.

:-)

[imastu pidgitaswell] 12/8/2020 10:05

Ta - now on its second day off the floor. But the same thing happened when that gap first closed (see chart earlier on the thread. For whatever reason, sentiment remains weak.

But results next week - should get some useful information.

[skinny] 12/8/2020 09:52

AH - I wasn't aware of the 'other' thread.

[imastu pidgitaswell] 12/8/2020 09:46

I quite liked my thread - but I would say that, wouldn't I?



:-)

[skinny] 12/8/2020 09:46

I've also bought back here for the first time in some years.

FWIW :- .

[pictureframe] 12/8/2020 09:37

First small nibble here. Always nice to be able to pay less than the placing price and the recent volume shows institutional interest.

[owenski] 11/8/2020 18:38

Looking to me like that gap from April has been filled, so could now be support area on further downside. As said, the underlying business surely is worth more than c60m minus cash.


free stock charts from uk.advfn.com

[owenski] 11/8/2020 17:15

That's some volume driving the price move today. Clearly some deeper pockets see some value at these levels.

[imastu pidgitaswell] 11/8/2020 16:01

That last comment was actually tongue in cheek at the time - but it is apparently the case. Who'd have thunk it?