Share Name Share Symbol Market Type Share ISIN Share Description
Costain Group Plc LSE:COST London Ordinary Share GB00B64NSP76 ORD 50P
  Price Change % Change Share Price Shares Traded Last Trade
  -1.00 -1.71% 57.50 1,953,673 16:35:13
Bid Price Offer Price High Price Low Price Open Price
56.40 57.00 57.30 55.80 56.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Construction & Materials 1,155.60 -6.60 -2.70 158
Last Trade Time Trade Type Trade Size Trade Price Currency
17:34:01 O 567 56.497 GBX

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Date Time Title Posts
12/8/202016:17UNDERVALUED GOOD recovery play.. COSTAIN6,506
17/4/202014:35COSTAIN - PE of 28
24/4/201308:47*** Costain ***13

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Costain (COST) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2020-08-14 16:35:5256.50567320.34O
2020-08-14 16:20:0457.502,5641,474.30O
2020-08-14 16:02:2556.791,284729.21O
2020-08-14 15:35:1357.5013,3547,678.55UT
2020-08-14 15:29:5657.0031.71AT
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Costain (COST) Top Chat Posts

Costain Daily Update: Costain Group Plc is listed in the Construction & Materials sector of the London Stock Exchange with ticker COST. The last closing price for Costain was 58.50p.
Costain Group Plc has a 4 week average price of 53p and a 12 week average price of 53p.
The 1 year high share price is 217p while the 1 year low share price is currently 31p.
There are currently 274,949,741 shares in issue and the average daily traded volume is 2,394,265 shares. The market capitalisation of Costain Group Plc is £158,096,101.08.
disruptor1664: For now I have taken my shares out. I plan to come back into costain, but there are too many opportunities over the next 3 month that will allow me to grow my investment and hopefully put more back into Costain later... unless the share price takes off, but you live with your consequences don't you.
aquaesulis01: Quite a positive update from Galliford Try this morning that should move their share price North, and could equally have been written for and apply to Costain. Hopefully a positive day here too on the back of the anticipated Galliford Try movement
aquaesulis01: The A465 contract dispute over the split of costs for the emergent additional work between the taxpayer and the company is still subject to final resolution and remains the one known black cloud on the horizon, for which Costain has already made provision in case the resolution is not in their favour. London based work which covers a third of the order book took the biggest hit during the lockdown, however, q2 has seen that pick up considerably, so I suspect the main reason for the drop in the share price is disappointment in the anticipated Government Infrastructure stimulus package rather than any ticking bomb.
sophia1982: The capital raising is fully underwritten. How likely is it that share price drifts under 60p? (I cannot remember many examples of this happening) Are bookrunners allowed to support the share price?
barnesian: Why would anyone buy this share at the moment? If you are already a holder, you will top up on the placing at 60p rather than pay market price over 60p. If you are not a holder, and are long term investor, surely you will wait until after the new shares come on the market to see where the share price settles. If you are a short term investor, there is probably more short term downside than upside to the current share price. I can see that there are sellers who don't want to invest more in this company and don't want to be diluted. But I can't see many buyers before 21st May. My guess is that share price will drift down towards towards 60p as we get near 21st May leaving many investors with a difficult decision. When the new shares are admitted to market on 29th May, then I expect the share price to go up towards 70p as delayed purchasers come in, but the price will be constrained by sellers of the placing hoping for a quick turn.
majwandco: (As recently posted on LSE) Costain’s share price by all accounts has had an awful run this last couple of months - Overall, the drop is justified, albeit I believe massively oversold. Why? The long-term positives • Equity Raise will only be offered on the basis that a 6-7% profit margin can be proved viable to investors. A £1billion/year revenue gives a target profit of £60m/£70m – For a company valued currently at £38m, that’s impressive. (see below for more details) • A conservative P/E of 10 on the above terms would value the company at circa £600m. Even if the £100m equity is raised at current share price of 35p, that would mean 285m new shares. Yes- Almost 3 new shares for every 1 held. Yet at a market cap of £600m being nearly 16x the current price. It still represents a share price in the region of £1.50 which would be a 300%+ increase on todays share price. • 70% of the workforce still operating throughout Lockdown (See latest RNS) meaning profits will take a limited hit compared to other sectors. This is due to the focus on remote working and the advanced IT infrastructure the company possesses. • £27billion to be in invested in infrastructure by the Government over the next 5 years. Costain are a leader in this sector and stand to benefit from this massively. • Collaborates with UK Government and Blue Chip Clients only • A total order book of over £4billion • £300m of work won in February ’20 alone www. • Potential additional profits gathered from A465 project. (see below) Looking at the most recent results, Profit was down from £40m in 2018 to a £6.6m loss in 2019, a £46.6 deficit, but that was due to a number of one-off events: 1. £20m loss due to arbitration costs resulting from a dispute on the A465 in Wales. (more information on that below) 2. £9.7m loss due to issues relating to a roof at the National Synchrotron scientific laboratory in Oxfordshire. 3. 16m loss due to Contract losses and delays. 4. 15m less net cash due to its commitment to fairer payment practices (reducing payment terms for Sub-Contractors). This transition is very much a one off financial ‘hit’. The above totals £60.7m, if any of, or a number of the above were avoided then the profits would have been substantially more than what was eventually realised. Granted all/most of the above are the fault of the Company, however these were significant one-off events rather than systemic consistent failures. BP’s oil spill in 2010 cost the company billions, profits were destroyed, but it didn’t turn them into a bad company because of it. Costain communicated that they wished to release much of the bad news within a concentrated timeframe. Ie. (Poor) End of year results, £100 equity raise, then came the unprecedented effect of Covid-19. I would rather this than a consistent drip feed of negative news if a strong, steady Share Price rise is to be realised. The Equity Raise Yes the lack of any information at all was/is extremely frustrating, it seems poorly executed by the board, but the facts remain: In order for this equity raise to take place it was noted that the company would need to demonstrate to its investors that it could move towards a 6-7% profit margin. (See link below) www. If the equity raise takes place, Equity Raise only provided on the basis of a targeted 6-7% profit margin. At £1billion/year revenue gives a target profit of £60m/£70m – For a company valued currently at £38m, that’s outlines how undervalued the current MC will be. So for me, if the equity raise does take place, yes there will be dilution, but it is also huge resounding positive that Costain’s transition to its ‘Leading Edge Strategy’ (Page 18 www. ) is viable. Profits locked in the A465 - £80m? The A465 was/is an extremely complex project which has resulted in a number of disputes with the Welsh Government. The only documented result thus far is a £20m loss to Costain which has obviously negatively affected the SP, however there is a potential HUGE upside coming Costain’s way if the below is to be believed: “as of November 2019 the Welsh government has put aside an £80.5m to cover expected liabilities for adjudications that have been ruled in favour of the contractor” www. A positive adjudication of this nature would have a substantial impact on the share price. Costain may not be primed to make the day traders their quick 40%, it may take a period of time to realise it’s true potential. There are multiple events that could change the landscape of the company overnight. Plus when the world reaches a stage where Covid-19 is a dim and distant memory, the government will be desperate to kick start the economy with heavy investment in the UK infrastructure, Costain will be ready to assist.
bogdan branislov: I do actually wonder about the downside risk if HS2 is cancelled or significantly delayed. There has been an unjustified nervousness around the sector since 2016. Costain has announced to profit reductions accompanied by remarkable price falls. If HS2 is cancelled you would need a lot Costain shareholders with the view of 'holding Costain for a 2 way bet on HS2 going ahead and on schedule'. Such skittish shareholders have long gone. Consider the emphasis of the comment now. I would say that 90% of the current Costain shareholders have consistent long term investment records of outperforming the market, you can tell from the comment. Profit forecast falls combined with sector anxiety when linked to the long term underlying strength of the business and the improving sector outlook has distilled down the shareholders to those who look for value in areas where the market has clearly over reacted. HS2 cancellation could result in some of our recovery gains being briefly eroded, but I suspect that it will not result in the share price falling below the recent lows.
bogdan branislov: Re HS2 and is cancellation still in the price. I remain a shareholder, I have a 6 figure sum invested in Costain, so clearly I have a vested interest, this is how I see it, warts and all. The chance of HS2 cancellation is, in my opinion, 50% now, possibly higher. Why? because the projected costs have risen and the regional railways desperately need investment, it will be hard to do both in this parliament. Directing investment at HS2 rather than the local railways including in the former Labour regions is not a good re-election strategy for the Conservatives. HS2 is under 20% of turnover for Costain in 2020, so lets say just over 20% of its profits. The long term impact comes down to simple maths. If you deduct just over 20% of next years profits from Costain's 2020 forecast, will this make a distressed business in terms of its balance sheet and does Costain still look cheaply priced without HS2 profits. The answers are, no, Costain's balance sheet equity should grow in 2020 without HS2 and yes, without HS2 still looks very cheap. But we know that markets are skittish, if HS2 cancels then yes there will be an instant share price impact perhaps of 10% or more, hard to see a big fall from the current price as Costain's valuation more than allows for HS2 cancellation, but if the price recovers, say 15%, then HS2 cancels, Costain could fall by 10% or more instantly. This does not concern me, Costain is both high quality and very cheap, a rare combination. If HS2 cancels, Costain will pick up a lot of regional work. The construction sector has been the hardest hit by the economic and political uncertainty of recent years, Costain has shown its quality by facing challenges without balance sheet distress. I also have large holdings in CSP, MGNS, FORT, GLE and LGEN. These companies, like Costain are high quality and under priced. They have not hit quite so many bumps in the road as Costain, but this is in the price, Costain is selling for much the same share price as nearly a decade ago, with very little share issuing since and look what has happened to Costain's balance sheet equity in the past decade, around 5x up I recall. Costain should double to triple in share price over the next 2 to 3 years, no guarantees obviously, but my SIPP is over 12x up since May 2009 from investment returns/dividends alone, so my while my calls are not always right, they are correct more often than not. Essential to take at least an 18 month view here, the road could remain a little bumpy for a while. This is not a 2 way bet on HS2 continuation, I anticipate HS2 cancellation and believe Costain to be a genuine bargain without HS2. I will keep calling it as I see it on this thread.
bogdan branislov: The more I look at Costain, the more I am becoming convinced that it is the cheapest stock on the UK exchanges. PE ratio under 8. Cash adjust and it is 6.5, by the end of 2020, the cash adjusted PE is likely to be nearer 6. The cash pile is 20% of the market cap by the way, and that is after the sector generally has had a tough time over recent years, although there is no evidence of that at all in Costain's balance sheet, none whatsoever. Growth in balance sheet equity - the real measure of growth in shareholder value - has been building steady for a decade, and that is after paying generous dividends, and is still expected to grow this year even though earnings will be about a third down on last year. Balance sheet equity for Costain is about 5 times higher than it was in 2010. The share price is actually slightly lower now than it was in 2010, if you allow for the small amount of share issuing over this period, the share price is effectively unchanged despite the considerable build up in value within the balance sheet since 2010. And then there is market cap, a mere 1.5 times TBV, bear in mind that Costain is not a land holding house builder or a real estate investment trust. This is a high quality company selling for a giveaway price. Bogdan
kinwah: Such is the nervousness in the sector,a fairly modest profit warning devastates the COST share price. This must be due to investors thinking as with Kier there is worse to come. Any problem is seen as just the tip of an iceberg. That has to be wrong but it takes a brave investor to try and pick the bargains amongst the corporate carnage.
Costain share price data is direct from the London Stock Exchange
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