AMP8 Water Framework Win with NWG & Trading Update

Costain Group PLC
10 January 2024
 

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Costain Group PLC

10 January 2024

Costain AMP8 Framework Agreement with Northumbrian Water Group and Trading Update

Appointment adds to Costain's wins in the new water regulatory cycle

 


Costain Group PLC ("Costain", or the "Company") announces that it has been appointed by Northumbrian Water Group (NWG) to shape, create and deliver its strategic infrastructure upgrade programme. The framework will see contracts awarded with a potential value of up to £670m to Costain during a 12-year period and builds on recent significant wins in the water sector for the Company.

The framework contract will see Costain work with NWG and its partners to shape, create and deliver solutions to meet the strategic needs of its business plan during Asset Management Period 8 (AMP8). The contract starts immediately and will run for a seven-year initial term with an option for a five-year extension.  

The work will involve:

·    The design, construction and commissioning of new water and wastewater treatment assets, asset renewals, asset modifications, refurbishments and extensions to treatment works.

·    Programmes of investigation and delivery work by asset type, geography and/or by specialism.

AMP8 will see the biggest investment in the water industry for decades. In 2023, Costain extended into AMP8 its Managed Service Provider contract with United Utilities and its consultancy work with Yorkshire Water. Costain has also won funding from Ofwat to support innovation projects.

Trading Update

Costain has had a positive trading year in 2023 and expects to deliver adjusted operating profit in line with market expectations. As a result, and reflecting an increase in financial income compared to 2022 and strong working capital management, together with the accumulation of £25.0m of positive working capital timings, Costain has ended 2023 with a net cash position of £164.4m (2022 year-end: £123.8m), significantly higher than market expectations of £128.6m.

Alex Vaughan, CEO, Costain said:

"Costain is a leading business partner to the water industry, ensuring that water companies achieve value for money as they meet the needs of their customers and the regulator during this crucial period for water investment. We are looking forward to supporting Northumbrian Water in this new working relationship, upgrading both its wastewater and water treatment infrastructure to improve people's lives and safeguard the environment. At Costain, we develop solutions by building collaborative and sustainable relationships with our customers, and we are excited to begin this vital work.

"This contract win not only reflects our continued growth in the water sector, but it also reinforces our commitment to improving critical infrastructure in the North-East of England. This includes major upgrades to the region's highways and our carbon capture work in Teesside as part of the East Coast Cluster, generating opportunities for regional suppliers and employment for local people.

"We are also pleased to report that we have had a positive trading year and expect to deliver adjusted operating profit in line with market expectations. Our cash performance has been very strong, driven by continued improved operational performance, an increase in financial income compared to 2022, and ongoing positive working capital timings."

 

Costain will issue its results for the financial year 2023 on 12 March 2024.

Enquiries:

 


Investors and analysts                                                                   paul.sharma@costain.com

Paul Sharma, Costain                                                                      +44 (0) 7867 501188

 

Financial media - Headland                                                          costain@headlandconsultancy.com

Andy Rivett-Carnac                                                                          +44 (0) 7968 997 365

Charlie Twigg                                                                                    +44 (0) 7946 494 568

 

Notes to editors

 


Costain helps to improve people's lives by creating connected, sustainable infrastructure that enables people and the planet to thrive. We shape, create and deliver pioneering solutions that transform the performance of the infrastructure ecosystem across the UK's transport, energy, water, and defence markets.

 

We are organised around our customers anticipating and solving their challenges and helping to improve performance. By bringing together our unique mix of construction, consulting and digital experts we engineer and deliver sustainable, efficient and practical solutions.

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