A raft of new contracts worth more than £900million helped infrastructure group Costain to notch up a record half-year order book despite tough construction markets.
It hopes that an acquisition to make it a bigger player in the North Sea oil and gas industry will help grow profits during the second half.
The group reported a 20% jump in its order book to a new high of £2.9billion after winning and extending a host of contracts.
Despite the boost, interim pre-tax profits plunged to £3.1million from £14.7million a year earlier as its bottom line suffered hits including £3.7million in costs from a failed merger with road and rail maintenance firm May Gurney.
Underlying operating profits edged 3% higher to £10.7million, however, in the six months to June 30.
Just this month, the group bought Aberdeen-based EPC Offshore, a specialist oil and gas project-management service company, for an initial £9.6million. The deal marked the launch of Costain Upstream, a new division combining EPC’s capabilities with ClerkMaxwell, the oil and gas engineering and support service provider acquired by Costain in 2011.
Costain Upstream will have more than 350 people and provide services across the life cycle of upstream offshore oil and gas assets. It will be led by EPC chief executive Keith Wallace and will be based in Aberdeen, with operating and support units at Maidenhead, Teesside, Manchester and Abu Dhabi.
Costain chairman David Allve said it had been an encouraging start to the year, but it suffered a blow after losing out in the race for May Gurney in April, when its recommended all-share merger was trumped by a £221million cash-and-shares bid from rival Kier.
This came as the second deal disappointment after it walked from plans to buy Mouchel in 2011, with its former bid target falling into administration.
Shares in the group rose 3.3% to 290p yesterday and Investec Securities analyst Andrew Gibb said the half-year results showed solid progress.
Costain said it had over £850million in revenue secured for 2013, with a further £700million in the bag for 2014. The firm, which has more than 4,700 employees, added it would continue to look for “targeted” acquisitions.
