Costain Group PLC · LSE:COST
Costain — H1 2021 Earnings Presentation
25 slides from Costain's earnings presentation, September 2021
Slide 1: Half year results for the six months ended 30 June 2021
Half 30minsyear and time results for questions Six months ended 30 June 2021 Improving people’s lives.
Slide 2: Alex Vaughan, Chief Executive Officer
Alex Vaughan Chief Executive Officer 2
Slide 3: Operating effectively, safely and profitably
Operating effectively, safely and profitably • Improving profitability • Positive cash generation and strong cash position • Operating effectively with contracts delivering to plan • Continued momentum with £334m of new work secured • High level of tendering activity • Broadening our decarbonisation
Slide 4: Assured delivery
Assured delivery Continued focus - realising the benefits of Operational Excellence Work Winning Delivery • Bidding discipline • Operational Excellence Model • Clear commercial expectations • Enhancing risk management • Risk management focus • Managing change programme A stronger, more resilient bus
Slide 5: Helen Willis, Chief Financial Officer
Helen Willis Chief Financial Officer 5
Slide 6: HY Financial Results
HY Financial Results HY21 HY20 • Adjusted operating profit Financial Summary £11.5m £m £m • Statutory profit before tax Group revenue1 556.8 547.3 £9.1m (HY20 loss £92.3m) Operating profit2 11.5 5.7 • Adjusted EPS increased Profit before tax2 9.4 3.8 to 2.8p Basic earnings per share2 2.8p 2.1p • Tax
Slide 7: Segmental profit
Segmental profit • Lower level of activity in the HY21 HY21 HY20 HY20 FY20 FY20 first half of the year in £m Adjusted1 Statutory Adjusted1 Statutory Adjusted1 Statutory Natural Resources - Water and Energy sectors Revenue 403.9 403.9 353.1 307.7 724.2 674.1 • High level of secured revenue for the se
Slide 8: Balance sheet
Balance sheet Consolidated statement of financial position HY21 FY20 £m £m Assets • Net assets increased to £190.8m Total non-current assets 126.8 118.4 Current assets • Strong net cash £113.0m from £102.9m Trade and other receivables 222.1 219.5 Cash and cash equivalents 157.0 150.9 Total current a
Slide 9: Cash and banking facilities
Cash and banking facilities Net Cash Position at Position at HY21 FY20 • Average month end net cash £102.9m, higher than FY20 Cash 100.0m 89.8m of £73.8m. Consistent throughout HY21 Cash held at joint ventures 57.0m 61.1m Loans (44.0m) (48.0m) • No drawdown of RCF 113.0m 102.9m Average month end net
Slide 10: 2021 cash bridge
2021 cash bridge Operational • Cash from operations £24.0m • Strong H1 net cash position of £113.0m comprising £100.0m of cash, £57.0m share of £m cash in joint operations and £44.0m of drawn debt • The average month-end net cash balance for HY21 was £102.9m (FY20 £73.8m, HY20 £94.1m) • Supplier pay
Slide 11: Strength of secured workload
Strength of secured workload Greater second half weighting supported by order book Order book revenue by year Strong forward workload 2021 • Order book of £4.0 billion, of which 2020 • £0.3 billion of new contract awards and extensions and framework positions 2022 confirmed in HY21 2021 In addition:
Slide 12: Financial summary
Financial summary • Operating profit of £11.5m (HY20: £5.7m), in line with the Board’s expectations • Positive cash generation in the period and strong net cash position • Strong balance sheet On course to deliver full year results in line with expectations 12
Slide 13: Alex Vaughan, Chief Executive Officer
Alex Vaughan Chief Executive Officer 13
Slide 14: Built strong market positions
Built strong market positions Our four markets driven by key strategic national priorities Our Markets Transportation Water Energy Defence Strategic National Investment Programmes • Strategic Highways Networks (Highways • Ofwat Regulated Water Investment • OFGEM Energy Investment (RIIO) • Defence Eq
Slide 15: Benefiting from Market Dynamics
Benefiting from Market Dynamics Aligning to meet our clients changing needs Transportation Decarbonisation Levelling Up Performance Digitisation Improvement • Intergovernmental Panel on • Government commitment to • Regulation is driving clients to • Clients are targeting Climate Change (IPCC) report
Slide 16: Demonstrating Competitive Advantage
Demonstrating Competitive Advantage An integrated approach to meet our targeted clients changing needs Network Rail – Gatwick Station United Utilities - MSP Gatwick Airport Operational Programme 8 year Managed Station Programme Optimisation Service Redevelopment Delivery Studies Programme framework
Slide 17: Leading as a socially responsible purpose led business
Leading as a socially responsible purpose led business A focused plan to achieve our responsible business goals Safety & Sustainability Governance People Social value • Outstanding safety performance – • TCFD compliance • The Times Top 50 employer for • In partnership with the Accident frequency rat
Slide 18: Significant market opportunity
Significant market opportunity Our four markets driven by key strategic national priorities Transportation Water Energy Defence We connect and keep We keep water clean and We power communities We keep the nation safe the nation moving flowing sustainability RIS2 HS2 Phase 1 & 2a AMP7 Ten-point plan
Slide 19: Summary and outlook
Summary and outlook • Operating effectively • Benefitting from the strong actions which have improved our business performance • Continue to secure good quality new work • Strong net cash position • Targeted markets remain resilient and positive Confidence in delivering significant growth in profit
Slide 20: Q&A
Q&A 20
Slide 21: Appendices
: (i COSTAIN Appendices . wT
Slide 22: Contract status
Contract status Peterborough and Huntingdon A465 Heads of Valley Dualling Section 2 • Mutual contract termination and settlement agreement signed in June • Settlement agreement entered into with Welsh Government in line 2020 with provision made for YE 2020 • One-off charge of £49.3m to income statem
Slide 23: Cash flow
Cash flow Consolidated cash flow statement HY21 HY20 £m £m Net cash at beginning of period 102.9 64.9 Cash from/(used by) operations 19.8 (81.6) Changes in working capital 4.0 74.7 (excluding pension deficit contributions) Net cash from/(used by) operating activities 23.8 (6.9) Pension deficit contr
Slide 24: HY21 IFRS 16 impact
HY21 IFRS 16 impact Income statement impact £m Fixed Assets impact £m Decrease in operating costs 7.0 Fixed assets opening position 32.7 Increase in depreciation (6.5) Additions 17.3 Increase in finance costs (0.3) Disposals (5.5) Net impact on income statement (0.2) Depreciation (6.5) Fixed assets
Slide 25: 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