Close Financial highlights Revenue2 £m 1,200 900 600 300 0 1,061.1 1,022.5 986.3 934.5 960.0 09 10 11 12 13 Underlying operating profit1,3 £m 30.0 22.5 15.0 7.5 0 22.0 17.4 24.1 24.5 27.4 09 10 11 12 13 Adjusted profit from operations1,4 £m 40 30 20 10 0 20.8 29.4 23.6 30.8 35.0 09 10 11 12 13 Net cash balance £m 160 120 80 40 0 120.5 144.3 140.1 105.7 57.7 09 10 11 12 13 Adjusted earnings per share1,4 Pence 48 36 24 12 0 23.0 36.4 31.1 39.7 44.1 09 10 11 12 13 Dividends per share Pence 12 9 6 3 0 8.25 9.25 10.0 10.75 11.5 09 10 11 12 13 Year ended 31 December 2013 2012 (restated)1 Revenue2 £960.0m £934.5m Operating profit Underlying3 £27.4m £24.5m Profit before tax Adjusted4 £31.0m £28.1m Reported £12.9m £24.7m Basic earnings per share Adjusted4 44.1p 39.7p Reported 18.8p 35.4p Net cash balance £57.7m £105.7m Dividend per share 11.5p 10.75p 2013 restated for revised IAS 19 Employee benefit accounting standard. Including share of joint ventures and associates. Underlying operating profit before Other items (amortisation of acquired intangible assets and employment related and other deferred consideration and in 2013 £3.7 million one-off costs associated with the offer for May Gurney Integrated Services plc) and in 2012 excludes the £2.8 million one-off costs resulting from pension scheme liability actions. Results stated before Other items (amortisation of acquired intangible assets and employment related and other deferred consideration and in 2013 £3.7 million one-off costs associated with the offer for May Gurney Integrated Services plc and non-cash impairment of £9.8 million on carrying value of assets in non-core Land Development activity in Spain). Financial highlights (PDF) 703.1 KB Highlights +11%adjusted basic earnings per share Underlying operating profit3 up 12% to £27.4 million (2012: £24.5 million) Increase of 10% in adjusted profit before tax4 to £31.0 million (2012: £28.1 million) Adjusted basic earnings per share4 increased by 11% to 44.1 pence (2012: 39.7 pence) Forward order book up 25% to £3.0 billion (2012: £2.4 billion): over 90% of order book comprises repeat orders and over 90% lower risk cost-reimbursable forms of contract £57.7 million year-end net cash balance (2012: £105.7 million), reflecting the anticipated transition to lower risk cost-reimbursable contracts, reduced levels of advance payments and increasing support services revenues Acquisition of EPC Offshore Ltd, a specialist oil and gas project management services company, and launch of Costain Upstream, to provide services across the life-cycle of upstream offshore oil and gas assets Recommended increase in final dividend for the seventh successive year, taking the total for the year to 11.5 pence, a 7% increase on the prior year Proposed firm placing and placing and open offer to raise circa £75 million (before expenses) to take advantage of the growing number of opportunities available to accelerate the Group’s development in the medium and long term +25%forward order book 3 Underlying operating profit before Other items (amortisation of acquired intangible assets and employment related and other deferred consideration and in 2013 £3.7 million one-off costs associated with the offer for May Gurney Integrated Services plc) and in 2012 excludes the £2.8 million one-off costs resulting from pension scheme liability actions. 4 Results stated before Other items (amortisation of acquired intangible assets and employment related and other deferred consideration and in 2013 £3.7 million one-off costs associated with the offer for May Gurney Integrated Services plc and non-cash impairment of £9.8 million on carrying value of assets in non-core Land Development activity in Spain). Highlights (PDF) 475.8 KB Environmental and social highlights Costain achieved the highest ranking, Platinum Big Tick, in Business in the Community's ('BITC') annual benchmark of responsible business management, the Corporate Responsibility Index We were delighted to be named in the Climate Performance Leadership Index as one of the best performing companies in the Carbon Disclosure Project’s annual FTSE 350 climate change report In September, Costain, in conjunction with BITC, hosted The Big Infrastructure Conversation at London’s City Hall In December, Costain was recognised at the prestigious NEF (The Innovation Institute) Innovation Awards, receiving high commendations for the Most Innovative Business Process and Most Inspiring Business Leader categories Environmental and social highlights (PDF) 475.8 KB Close Our business model Our business model Creating value through our customer focused strategy Focusing on six strategic priorities Our market focus Our business divisions Our service lines Delivering shareholder value Business model (PDF)1675 KB Close A new approach to carbon capture Tracking passenger flows through rail hubs Smart motorways Managing Mobicloud to improve site efficiency Bridging the gap with a robot tug BIM brings down barriers among project team Cutting the cost of carbon capture Vulnerable road users Harbour Way, Port Talbot The Big Infrastructure Conversation A new approach to carbon capture Carbon capture – reducing the amount of CO2 pumped into the atmosphere – is vital to help control climate change. Current carbon capture technology requires the installation of massive solvent scrubbing 'absorber' columns. The visual impact of these is considerable – less so with coal-fired power stations, much of whose existing infrastructure is tall, but a major problem with ‘low-rise’ gas-fired stations. Costain is collaborating with Edinburgh University on novel designs of absorber column with an emphasis on modularisation. The project is looking at fundamental modelling such as the flow of gases and liquids. It is thought that alternative column designs will also involve shorter construction time, be easier to upgrade in the future, and possibly more cost-effective. Results of the year-long project will be published by mid-2014. Engineering Tomorrow… 'in action' Tracking passenger flows through rail hubs Problem: How to accurately measure passenger usage of a railway station where many travellers use it only to change trains and therefore never pass through the gatelines? Answer: Costain has applied its COpath solution, provided in partnership with Path Intelligence, which uses sensors to detect signals emitted by mobile phones carried by passengers using the station. The sensors allocate an anonymised designation to each telephone and record its movements, creating a detailed picture of passenger flows. Costain has pioneered COpath’s first use in the UK rail sector. It allows station and airport operators to understand passenger movements and behaviours to, among other things, reduce congestion and increase non-fare revenues. Its successful trial at one station has led to installation contracts for several more. Engineering Tomorrow… 'in action' Smart motorways Sometimes, innovation is about behaviours, and not just new technology. In 2009, Costain entered a partnership agreement to develop what are now known as 'smart motorways'. This is a way of creating more capacity from the existing road network at a fraction of the cost of building new lanes. Motorists can use the hard shoulder as a permanent running lane or when instructed by signals on overhead gantries. "The innovation that we can be proud of is working together," says Highways Programme Director Tony Scutt. "I’ve been in meetings where six contractors were sharing ideas for the benefit of everyone. Getting that behavioural change of collaboration is the real ground-breaking part of this contract." This collaborative programme approach has led to the Department for Transport’s 20% efficiency savings target against the Highways Agency’s project estimates being exceeded. Engineering Tomorrow… 'in action' Managing Mobicloud to improve site efficiency Mobicloud is a European Union-funded project to develop a 'corporate app store' – part of the EU’s Competitiveness and Innovation Framework Programme. It is deployed in both Android and IOS tablets that are planned to connect to Costain’s corporate systems via a cloud-hosted platform; the Group believes it is one of the leaders in deploying the system in the construction industry. Mobicloud’s first development with Costain is a site diary app that allows engineers to record details or events as they happen while out on site. This aids accuracy and saves time. A joint effort with Sheffield University is underway to develop further apps to estimate volumes and to replace traditional paper-based survey books. The ultimate aim is to have a suite of apps bespoke to Costain. Engineering Tomorrow… 'in action' Bridging the gap with a robot tug Using miniature robot ‘tugs’ to help rig new cables between electricity pylons high across roads or railways is not new. But getting approval for their use in a fraction of the normal three to four years, is. And that’s what Costain anticipates in 2014. The battery-powered, remotely-controlled tug system developed by Costain and subcontractor partner TLI is designed to eliminate the large, expensive scaffolding structures normally required before initial ropes and pulley blocks can be strung between pylons. Once in place, new cables can be hauled through the pulleys. Getting the tug approved involves considerable methodology and effective planning to prove the tug’s safety. Far faster than traditional methods of rigging new cables, Costain believes this could potentially save its client several hundred thousand pounds in 2014. Engineering Tomorrow… 'in action' BIM brings down barriers among project team Getting designers and site personnel to talk the same language can be problematic. At the upgrade of London Bridge Station, Costain and Building Information Modelling (‘BIM’) are solving that problem. BIM involves creating an intelligent, virtual 3D model of a facility. At London Bridge design consultants and specialist subcontractors are sharing highly-detailed 3D models. This enables collaborative reviews of progress. Engineers concerned about measurements on a project document, for example, can now simply send a screenshot taken from the model to the designer asking for confirmation of its accuracy. The team is also in the process of piloting an innovative mobile form-filling app solution that will allow site engineers to complete multiple forms electronically using iPads. This will reduce the need for paper forms on site. Engineering Tomorrow… 'in action' Cutting the cost of carbon capture Costain’s heritage of gas processing expertise is being directed towards a new avenue. Research is underway to remove CO2 from a new generation of coal-fired power plants by processing the gas stream at low temperature to separate the CO2 in liquid form. This approach has been patented by Costain and holds out the promise of reducing the substantial costs currently associated with carbon capture, which is a major front in the battle to minimise climate change. If less costly methods of removing CO2 can be developed, the likelihood of implementation by public or private sector energy producers is increased. If successful, the fruits of this research will be available in the 2020s. Engineering Tomorrow… 'in action' Vulnerable road users Following nationwide concern about the safety of cyclists and pedestrians on our streets, particularly in London, we introduced a number of measures in order to play our part in addressing this very serious issue. The measures include enhancements to the specification of vehicles rated greater than 3.5 tonnes, requirements with regard to registration with the Fleet Operators Registration Scheme and recommendations with regard to driver training. Adoption of these leading-edge standards aims to reduce the risk to vulnerable road users whilst also improving the safety standards of transport and construction vehicles, thereby contributing towards making our roads a safer place. Engineering Tomorrow… 'in action' Harbour Way, Port Talbot The Harbour Way dual carriageway links the M4 Junction 38 to Port Talbot and its docks. The route passes through an area of the Port Talbot Steel Works site which has an extensive historical legacy and is an area of land that was grossly contaminated from previous heavy industrial uses. Through the implementation of a remediation strategy and a material management plan, an estimated 23% saving in CO2e was realised through techniques such as the remediation and reuse of previously contaminated soils and sourcing fill materials locally. Prior to construction over 1,800 reptiles were translocated to new receptor sites. Areas of grassland identified as suitable habitat for the Small Blue Butterfly (a UK Biodiversity Action Plan species) were also moved prior to construction and additional replacement habitat was provided along the scheme corridor. Over 15,200 new trees and shrubs were planted in the landscaping scheme and a Sustainable Urban Drainage System ('SUDS') was incorporated into the drainage design with planted swales and ponds to provide additional habitat and reduce flood risk. The project's achievements were recognised by winning a CEEQUAL Excellent Award as well as Best Conceptual Design in the Brownfield Briefing Awards. Engineering Tomorrow… 'in action' The Big Infrastructure Conversation In September Costain, in conjunction with Business in the Community, hosted The Big Infrastructure Conversation, at London’s City Hall. On the day students, ambassadors, apprentices and trainees met business leaders and discussed their own apprenticeship experiences, the importance of inspirational work experience and skills. For the industry leaders, there was also an opportunity to share best practice about how businesses can tackle youth unemployment and to listen to young people about their needs, hopes and ambitions for the future, particularly in relation to securing valuable career advice. Engineering Tomorrow… 'in action' Annual Report home Download centre Feedback Contact Costain.com 2013 highlights Strategic report Governance Financial statements Download full report (PDF) 6.1 MB Highlights +12% underlying operating profit Highlights +10% adjusted profit before tax Highlights +11% adjusted basic earnings per share Highlights +25% forward order book Chief Executive's review Chairman's statement Finance Director's review Our business model Engineering Tomorrow... today Share this site Costain Group PLC 2014 © Annual Report Home | Download centre | Feedback | Contact | Legal | Accessibility | Costain.com