Costain Share Discussion Threads

[tresham] 08/6/2023 18:37

There are a lot of busy fools in this business!

[woodpeckers] 08/6/2023 18:26

"Dr Ioannis Brilakis, Laing O'Rourke Reader in Construction Engineering, will lead the project titled Digital Roads, which aims to improve the cost, time, quality, safety, sustainability, and resilience performance of expressways. Co-investigators Dr Fumiya Iida, Professor Abir Al-Tabbaa and Professor Mark Girolami will join him. The Cambridge engineers will work in partnership with Highways England and construction and engineering company Costain.

The vision is to deliver roads made out of smart materials that can measure and monitor their own performance over time. The researchers will use graphene infused concrete coatings to enable self-sensing on both the road surface and the median barrier, informing the road's Digital Twin through robotic monitoring. These self-sensing and self-healing materials, along with a wide range of measured data, will inform the data-science enabled digital processes, resulting in making better design, construction, maintenance, and operation predictions. This will make roads considerably less expensive, more reliable, and safer, allowing highways agencies and councils to identify when repair work is needed."

[woodpeckers] 08/6/2023 17:51

"We will continue to bring our innovation and expertise to other critically important National Highways projects."

Seems they are picking and choosing their projects more. They are doing a lot of work with Highways England on the Digital Roads project.

[boonkoh] 08/6/2023 13:31

COST would have agreed/known this before public announcement, so ample time to put our RNS if indeed it is a blow to profits for the year.But the fact that no RNS means they don't see it as materially changing the profit outlook for this year. So as others have speculated, maybe there was no profit in being involved in the project and that was already baked into management expectations. Good buying opportunity IMO.

[casholaa] 08/6/2023 13:27

I'm going to grasp the opportunity with both hands today. I don't think Costain would have wanted to quit one project and share on another. I don't think the HA would have wanted to start mucking about with contracts and money. So my thought process tells me that costs have rocketed and that Costain are not there to subsidise the Government.

[sikhthetech] 08/6/2023 13:15

contracts cancelled, as expected.
Funding is a huge problem in the current environment.


sikhthetech - 19 Mar 2023 - 14:44:17 - 2471 of 2732
The banking crisis is snowballing, started with smaller US banks and now Credit Suisse..

With the banking crisis, govn having to cut back, inflationary pressures, I think there will still be further turmoil in the markets. I wouldn't like to be in banks, house builders, hospitality, or construction at the moment.

[catabrit] 08/6/2023 13:13

Perhaps they’ll deal with it during the H1 results. The good thing is the downside is pretty limited because of the net cash. It’s highly unlikely to drop below that. But I do think it puts a question mark on the upside if they’re going to walk away from projects that don’t meet their risk return criteria. Purely because of the corresponding drop in revenue and the order book.

But on the plus side, if costs likewise drop and more of the revenue pie is less risky consultancy related work, we should - eventually - get a multiple that reflects that. But it will take a while and might be a bit volatile / messy along the way.

Anyway, let’s see what we can find out.

[this_is_me] 08/6/2023 12:47

The market obviously thinks that it is important news; why no RNS?

[greg the grinch] 08/6/2023 12:43

Obviously the margin was too thin -- good to walk away.

LTH will buy at this price and make a quick paper profit.

[catabrit] 08/6/2023 12:16

It’s fair that the share price is down today. They have a lumpy order book and this was a big contract. I’m seeking more details.

The balance between minimising risk (a good thing) and reducing revenue (a bad thing) is a tough one. We should celebrate the pivot towards consultancy and the willingness to drop schemes that are too risky. But we need to keep an eye on revenues, too. Complex delivery is still a sizeable part of the business.

As you all know, I’m one of the biggest Costain bulls out there but I’m no kamikaze pilot. We’ve had a raft of gloomy news from HS2 to Smart Motorways and now this.

It’s something we need to keep an eye on and the correction today is warranted.

I’ll revert when I know more. Currently cycling around Scotland!

[disc0dave45] 08/6/2023 12:14

Sorry, just noticed you beat me to it :)

[disc0dave45] 08/6/2023 12:13

Https://www.constructionenquirer.com/2023/06/08/costain-taken-off-1-3bn-a66-road-delivery-team/

[a day in the life] 08/6/2023 12:11

constructionenquirer.com/2023/06/08/costain-taken-off-1-3bn-a66-road-delivery-team/

"National Highways has pulled Costain from the quartet of contractors mobilising to deliver the £1.3bn A66 Northern Trans-Pennine upgrade project."

[hamhamham1] 08/6/2023 12:00

Sp down over contract losses.
But small upside, for me, sharing with Kier, who I also own.
Anyway. Back to under my rock.

[hamhamham1] 07/6/2023 17:18

For a 2p divi that would be £16-17m profits.

[roguemale1] 05/6/2023 13:13

Yep.
He has said 3x cover mind. On some metrics they should have already been one announced, but as per my AGM question we shall see what happens when they conclude the pension debate and renewal of facilities...
Cynically, my guess is that process wont be that quick and it'll slip to next year and though its now feeding into total shareholder reward calc for their boneo, its still a low %age.... .

[hamhamham1] 04/6/2023 14:59

And to finance a 5p dividend. That would cost nearly £14m of profits.
So on a comfortable say 2-3x divi cover, that would need approx £28-42m profits.
That's all very doable :)

[hamhamham1] 04/6/2023 14:36

There are about 2.5x shares available now than before the raise a couple of years ago.
Gone from roughly 110m to 276m ish.
So if annual dividends were say approx 12.5p av before 2020.
Then if we get back to those levels, look at getting approx 5p divi equivalent now.
That's near 10% on current share price
Just saying ;)

[roguemale1] 25/5/2023 13:29

No great drama, bit of turbulence in Infrastructure as we know, good things in defence.Nett zero.

[catabrit] 25/5/2023 11:44

Thanks Rogue. Please share minuses.

[roguemale1] 25/5/2023 10:57

Catabrit.
Similar overall scuttlebutt. Pluses and minuses but overall fine.