British construction firm Costain has said overall activity levels have now stabilised, after the firm’s London projects ground to a halt during lockdown.
Costain’s performance was hampered by the coronavirus pandemic with major projects, amounting to a third of operating revenue suspended. On-site activities in London were more significantly impacted during lockdown, as the firm was forced to employ strict measures to ensure safe working conditions and travel.
The board and senior leadership team agreed a 30 per cent salary cut for up to three months in a bid to shore up the engineering firm’s accounts.
But Costain today said activity levels on its sites had now “stabilised and improved” over the second quarter.
“Although the ongoing implications and impact of Covid-19 remain uncertain, we are pleased to be back working on site across substantially all of our operations,” the firm said in a statement, released ahead of its annual general meeting today.
The company said it expected its order book to be approximately £4.2bn at the half-year end, and added that it had seen big contract wins and extensions this year.
“The order book has further upside potential from some significant framework agreements including the Highways England Smart Motorway Alliance”, said Alex Vaughan, chief executive of Costain.
The deal is one of many major contracts struck by the Maindenhead-based firm this year, including a £3.3bn contract to design and build the tunnels connecting the HS2 railway to London’s Euston station secured in April.
Today’s announcement comes after Costain last month completed a £100m capital raise to shore up emergency cash. Costain said the move provided it with “a strong platform to capitalise on the opportunities resulting from the UK’s positive infrastructure outlook.”
“We are already benefiting from this improved financial position, with Costain winning a number of new contracts and framework awards since the fundraising was announced.”
Costain’s half-year results will be posted on 19 August.
Shares were down 0.7 per cent to 76.1p at 8.30am.