2005 - 2006 - Pinsent Masons Water Yearbook 2012

UNITED KINGDOM PART 3 (ii): COMPANY ANALYSIS: LOCAL/REGIONAL PLAYERS
Costain Group Plc
Costain is an engineering and construction company that in recent years has become increasingly
involved in managing water contracts and assets, often as a consortium partner. The Asset
Management Division is responsible for managing the development of new projects, while the PFI
Division handles a variety of BOT contracts in the UK.
Costain Group Plc, profit and loss account
Y/E 31/12 (£ million) 2000 2001 2002 2003 2004
Group turnover 381.2 457.1 521.8 623.5 673.2
Operating profits -2.8 0.3 0.5 5.4 10.2
Joint ventures & associates 1.3 1.9 7.5 10.1 8.7
Interest paid 4.2 4.5 1.9 -0.8 -1.1
Pre-tax profit 6.5 8.7 11.3 16.1 15.2
Earnings per share (p) 1.5 2.5 2.8 3.7 4.3
Water contracts account for 20% of group turnover in the first half of 2005 and will rise to 35-50% as
the AMP4 contracts and Project Aquatrine enter into operation, with an order backlog of £1.2 billion.
This is equivalent to 20% of the asset management programmes being carried out in England and
Wales during the 2005-10 AMP4 period.
2005 Southern Water 5 years, capex management Water & wastewater services
4D’s Southern Water contract (Costain 40%, UU 40% & Montgomery Watson Hazra 20%) is worth
£300 million to Costain and covers 270 water and wastewater projects, involving a total of £750 million
in work. During AMP3, Costain and Black & Veatch gained £110 million of business.
2005 UK MoD 25 year PFI Water & wastewater services
Coast to Coast Water (C2C), consisting of Costain (50%) and Severn Trent Services (50%) gained
Package C of Project Aquatrine, serving 1,500 military sites in South East, East and North England.
The contract is worth £1 billion and started in April 2005.
2005 United Utilities 5 years, capex management Water & wastewater services
GCJV, a joint venture with Galliford Try and Atkins are the Southern Area Framework Contractor for
AMP4, worth £170 million to Costain. During the final three years of AMP3, GCJV oversaw 176
projects, generating £196 million in revenues.
2005 Thames Water 5 years, capex management Water & wastewater services
Costain worked with Thames Water during AMP2 and AMP3, including £162 million in water treatment
projects for London and wastewater projects for the south east part of the company. The AMP4
framework contract covers all works within the M25 area and includes a ten year extension covering
AMPs 5&6. There is a possible £103 million in further work, involving projects at Perry Oaks and South
Iver.
2005 Bristol Water 5 years, capex management Water services
Costain, along with Purac (AWG) and Black & Veatch, was appointed in June 2005 as the preferred
partner for £50-60 million of business overseeing clean water management.
2005 Glas Cymru 5 years, capex management Water & wastewater services
This is a 10+5 year contract initially covering the AMP4 period. Revenues for Costain will be £20
million per annum, covering civil engineering work in North Wales.
340 Pinsent Masons Water Yearbook 2005 – 2006