Press Release

Costain announces a strong operational performance, a record year-end order book and an increased dividend for the year. Further progress has been delivered by focusing on blue-chip customers with committed long-term investment programmes.

• Revenue of £1,061.1 million (£996.0 million) exceeds £1 billion for first time in 16 years
•  Profit from operations increased by 14% to £20.8 million (2008: £18.3 million)
•  Profit before tax of £18.1 million (2008: £23.1 million)
•  Strong net cash position of £120.5 million (2008: £146.6 million) 
  •  average month-end cash balance of £125.3 million during the year (2008: £117.4 million)
•  Record year-end forward order book, up 30% at £2.6 billion (2008: £2.0 billion)
  •  repeat order customers account for 84%
  •  includes c. £900 million of secured work for 2010
•  In addition, preferred bidder positions at year-end of over £400 million 
  •  increased to over £600 million since year-end
•  Banking and bonding facilities recently extended to 2013 and increased by 20% to £345 million
•  IAS 19 pension scheme deficit of £75.4 million, net of deferred tax, a similar level to the half-year (2008: £36.1 million)
  • defined benefit pension scheme closed to future accrual during the year

 Recommended final dividend of 0.55p, increasing total payout for the year by 10% to 0.825p (2008: 0.75p)

 “Choosing Costain”

Implementing the next stage of our strategy – “Choosing Costain”

A commitment to delivering a full-service offering, from front-end engineering consultancy and design, through construction to maintenance

Focussing on the Infrastructure, Environment, and Energy & Process markets where we will place emphasis on those blue-chip customers with repeat order commitments who are looking for solutions for each phase of the “life cycle” of their assets.

David Allvey, Chairman, commented:

“This was an excellent overall operational performance. Once again, the Group has demonstrated its resilience in a difficult economic environment. We are confident that our position in markets underpinned by strategic capital expenditure, regulatory commitment or essential maintenance requirements will continue to stand us in good stead.

“With a record year-end order book, a significant amount of work already secured for 2010, a net cash balance of over £120 million and customers committed to long-term capital investment programmes, Costain is looking to the future with confidence. That confidence is reflected in the Board’s recommendation to increase by 10% the total dividend for the year.

“Building on our success, we are now implementing the next stage of our strategy, “Choosing Costain”, which will ensure that the Group enhances its position as one of the leading players in the industry.”

10 March 2010