Costain Group Plc · LSE:COST
Costain — FY2024 Earnings Presentation
34 slides from Costain's earnings presentation, March 2025
Slide 1: Results presentation
Results presentation For the year ended 31 December 2024 Together we shape, create, deliver Results presentation Year End 2024
Slide 2: Operating Review
Operating Review Alex Vaughan Chief Executive Officer Together we shape, create, deliver Credit - Tideway
Slide 3: Highlights
Highlights Another strong financial performance, with record growth in forward work position to £5.4bn • Another strong full year 2024 (FY 24) financial performance • Revenue of £1,251m • Adjusted operating profit(1) of £43.1m up 7.5% • Adjusted operating margin of 3.4% (FY 23: 3.0%) • Adjusted EPS
Slide 4: Transportation
Transportation Broadening customer mix Revenue Improved operating performance £845.8m Increase in both adjusted operating profit and margin. (FY 23: £943.1m) Road Adjusted operating profit1 Completing three Highways schemes and continuing highways mandate. Next phase of National Highways £29.9m M60
Slide 5: Natural Resources
Natural Resources Major Water AMP8 wins in year with growth in all sectors Revenue Operating profit increase Continued improvement in operational £405.3m performance and growing margins. (FY 23: £388.9m) Water Adjusted operating profit1 Secured significant wins in AMP8 investment cycle, with both ne
Slide 6: Financial Review
Financial Review Helen Willis Chief Financial Officer Together we shape, create, deliver
Slide 7: Headline financial results
Headline financial results Another strong financial performance, with record growth in forward work position FY 24 FY 23 Change • Group revenue of £1,251m, a reduction on the prior period reflecting the Financial Summary timing of contract starts and completions £m £m % Revenue 1,251.1 1,332.0 (6.1)
Slide 8: Revenue walk
Revenue walk Growth in Natural Resources more than offset by expected reduction in Transportation Revenue FY 24 vs FY 23 (6.1)% • Overall group revenue reduced by 6.1% reflecting the timing of contract £1,332.0m starts and completions £40.2m £6.2m £0.6m £9.6m £1,251.1m £(92.2)m £(45.3)m +4.2% Natura
Slide 9: Operating profit walk
Operating profit walk Adjusted operating profit growth on increased operating margin in both divisions Operating Profit FY 24 vs H123 • Adjusted operating profit growth of 7.5%. Reported operating profit up 16.0% £1.9m £2.0m £43.1m • Transportation operating margin up £(0.9)m 50bps to 3.5% (FY 23: 3
Slide 10: Adjusting items
Adjusting items Total adjustments to reported items in the year were £12.0m £m FY 24 FY 23 Other Adjustm ents Transformation and Transformation and restructuring restructuring costs costs 5.4 8.0 Fire safety Fire safety claims claims 6.7 0.0 Profit on sale of assets previously w Profit ritten down w
Slide 11: Finance income/(expense)
Finance income/(expense) Net finance income benefitting from strong cash position Finance Income / (Expense) FY 24 FY 23 • £6.7m of interest income from bank deposits, higher than FY 23 of £4.8m £m £m on increased cash placed on deposit at higher rates Interest income from bank deposits 6.7 4.8 Inte
Slide 12: Balance sheet
Balance sheet Net assets position continues to strengthen Consolidated statem ent of financial position FY 24 FY 23 £m £m as restated Assets • Strong net cash position of £158.5m after Retirement benefit asset 54.9 53.5 £10m share buy back Other non-current assets 99.8 90.6 Total non-current assets
Slide 13: FY 24 cash walk
FY 24 cash walk Continued strong adjusted free cash flow 200.0 38.3 • Adjusted free cash flow of £27.1m (2.2) 3.2 • Closing net cash position of £158.5m, 180.0 (9.0) (2.0) 164.4 (11.3) 160.0 (10.0) 158.5 which included the costs of our £10m (3.2) (1.1) (8.6) +£27.1m share buyback programme which 140
Slide 14: Cash and banking facilities
Cash and banking facilities Continued growth in average cash during period Net Cash £m FY 24 FY 23 • No drawdown of RCF through 2024 Cash 95.8 105.2 Cash held at joint ventures 62.7 59.2 • Average month-end net cash balance during the period was Loans 0.0 0.0 £169.8m, higher than FY 23 of £141.4m 15
Slide 15: Strength of forward work position
Strength of forward work position Well positioned to deliver future growth Forward Work Position 6.0 • Forward work position of £5.4bn, a record increase £5.4bn of £1.5bn on FY 23 5.0 £3.9bn £4.3bn • Contract wins across all sectors and significant 4.0 2.9 growth in Water and Rail 3.0 1.8 2.5 • More
Slide 16: Predictable delivery
Predictable delivery Effective risk management underpins margin growth Work winning Contract duration Enhanced legal Senior Independent review Operational Financial Deep dive process management standards oversight risk review review Underpins margin targets and quality of forward work Results presen
Slide 17: Capital allocation
Capital allocation • Invested for growth during FY 24 as part of our Transformation programme. • Doubling year on year of full year dividend of 2.4p with proposed final dividend per share of 2p. • Targeting dividend cover of three times adjusted earnings. • Actuarial valuation of the Costain defined
Slide 18: Further progress in FY24
Further progress in FY24 • We secured a record increase in volume of work in FY24 • Transformation focus shifted to continuous improvement • The high quality and volume of our forward work, together with growth on existing frameworks, gives us good visibility on future revenue and margin • Exceeded
Slide 19: Strategy & Outlook
Click icon to add picture Strategy & Outlook Alex Vaughan, Chief Executive Officer Together we shape, create, deliver Results presentation Year End 2024 19
Slide 20: Our business
Our business Creating a sustainable future Purpose Improving people's lives Vision To create connected, sustainable infrastructure enabling people and the planet to thrive Sustainable A more prosperous UK A more resilient UK A decarbonised UK future Strategic Growth in strong Predictable best in A r
Slide 21: Strong infrastructure investment
Strong infrastructure investment Majority of customers procure against five-year investment plans1 Committed investment Investment period 2025 2026 2027 2028 2029 2030 National Highways £27bn 2020-2025 RIS2 RIS3 High Speed Rail £45-54bn 2018–2030 Phase 1 (London–West Midlands) Integrated Rail Plan £
Slide 22: Meeting our customers broader needs
Meeting our customers broader needs Results presentation Year End 2024 22
Slide 23: Engineering & construction solutions on major capital programmes
Engineering & construction solutions on major capital programmes A leading capital delivery partner for complex infrastructure • Collaborate across our customer and supply chain to create a solution that reduces risk, enhances reputation and leaves a positive impact on society, the environment and t
Slide 24: Building a meaningful consultancy service
Building a meaningful consultancy service Leveraging our core expertise in complex programme delivery Delivery Partner • A leading Delivery Partner overseeing our customers’ major infrastructure programmes • A growing design and Project Controls/P3M expert • An energy process engineering expert Defe
Slide 25: Strong growth in forward work position
Strong growth in forward work position • Forward work increased from £3.9bn to £5.4bn in 2024 • We have an increasingly diverse customer base: • Major series of wins in Water with AMP8 and AMP9 • Increasing presence at Heathrow • Growing Energy, and Defence and Nuclear Energy • Growing consultancy r
Slide 26: Creating a sustainable future
Creating a sustainable future Steadfast in our commitment to ESG • Well placed to meet our customers’ expectations and offer the best solutions • Supports winning new work and business growth • Attract and retain the best team, who are motivated by our purpose to improve people’s lives • Continue to
Slide 27: Confidence in the Group's growth prospects
Confidence in the Group’s growth prospects Ongoing progress in FY 25 and FY 26, with a step change in FY 27 performance • Exceeded margin targets of 3.5% during FY 24 and on track to meet 4.5% FY 25. • Increase of 150% in final dividend to 2.0p, with 2.4p for full year 2024, a doubling year-on-year.
Slide 28: Q&A
Click icon to add picture Q&A Together we shape, create, deliver Results presentation Year End 2024 28
Slide 29: Appendices
Click icon to add picture Appendices Together we shape, create, deliver Results presentation Year End 2024 29
Slide 30: Cash flow
Cash flow Consolidated cash flow statem ent FY 24 FY 23 £m £m as restated Cash from operations before changes in w orking capital and provisions 46.2 48.1 Changes in w orking capital and provisions (16.6) 29.5 Movement in employee benefits (1.9) (8.0) Interest and tax paid 1.0 0.2 Net cash from oper
Slide 31: Adjusted to Reported Reconciliation
Adjusted to Reported Reconciliation Results presentation Year End 2024 31
Slide 32: Adjusted Free Cash Flow
Adjusted Free Cash Flow Adjusted free cash flow FY 24 FY 23 £m £m Cash from operations 41.7 69.6 Add back cash flow on adjusting items 8.6 9.2 Add back pension deficit contributions 2.0 8.1 Less cash flows on cash and cash equivalents - with restrictions (14.0) (14.1) Less taxation (2.2) (0.7) Adjus
Slide 33: FY 24 IFRS 16 impact
FY 24 IFRS 16 impact Incom e statem ent im pact £m Decrease in operating costs 13.9 Loss on disposal of assets (0.7) Increase in depreciation (11.4) Increase in finance costs (2.5) Net im pact on incom e statem ent (0.8) Fixed Assets im pact £m Fixed assets opening position 26.4 Additions 18.4 Dispo
Slide 34: Cautionary forward-looking statements
Cautionary forward-looking statements This presentation contains certain statements that are forward-looking statements based on current expectations and reasonable assumptions. Various known and unknown risks, uncertainties and other factors may cause actual results to differ from any future result