**London**: Costain has announced a £1.5 billion increase in its forward work, now totalling £5.4 billion. CEO Alex Vaughan anticipates continued growth, driven by long-term projects and upcoming initiatives in the water sector, amidst ongoing macroeconomic challenges.
Costain, the UK-based infrastructure and engineering company, has reported a significant financial performance for the year ending 31 December 2024, showcasing a £1.5 billion increase in its forward work. This rise brings the company’s total high-quality forward work to £5.4 billion, according to statement from the firm and comments made by its CEO, Alex Vaughan, during an interview with New Civil Engineer (NCE).
Vaughan articulated that the concept of “high-quality forward work” refers to long-term projects, typically spanning five years, that allow the company to collaboratively develop solutions with clients and establish agreed budgets. “It allows us to bring value to the customers. It’s strategic, long-term investment,” he explained. He added that this domain fits perfectly within Costain’s expertise, contributing to healthy profit margins.
Looking ahead, Vaughan indicated an expectation of further growth in fiscal years 2025 and 2026, with a “step change” anticipated in 2027. He outlined that upcoming projects, particularly in the water sector, exemplified by the AMP8 initiative, alongside various highway, defence, and energy schemes, would contribute significantly to this anticipated spike in performance.
In the wake of global economic fluctuations, including trade tariffs from the USA and inflationary pressures stemming from geopolitical conflicts, Vaughan noted that Costain has remained unaffected by rising materials costs. He remarked, “Macroeconomic issues are out there, but what I can see is our customers are investing heavily in driving forward and improving their businesses.”
The Planning and Infrastructure Bill, recently published, was described by Vaughan as a “positive step” that would facilitate more efficient project delivery. He emphasised the importance of planning in accelerating infrastructure development, indicating that this will support achieving a 10-year infrastructure strategy set to outline future investment priorities.
Despite speculation about potential cuts to the Great British Nuclear-led small modular reactor (SMR) programme, Vaughan expressed confidence in the initiative’s viability and Costain’s involvement. “We see huge investment, and SMRs are part of the mix in terms of the energy space. We’re definitely involved in that,” he stated.
Additionally, insightful analysis from Investec highlighted a shift towards increased consultancy revenue within Costain, suggesting it could enhance the group’s margin improvement targets. Vaughan elaborated on this, mentioning the company’s role in significant projects, such as the hydrogen and carbon capture initiatives for BP at Teesside, and extending the lifespan of existing nuclear facilities with EDF.
Costain is also engaging with Network Rail on master planning for future rail infrastructure, reinforcing that consultancy is becoming an increasingly important facet of their operations. Vaughan affirmed, “We’ve got the skills and expertise to be able to support our customers together,” thus highlighting the company’s ongoing commitment to expand its capabilities across various sectors in the infrastructure domain.
Source: Noah Wire Services
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