Latest news with #Costain
Yahoo
9 hours ago
- Business
- Yahoo
This engineer remains on track despite issues on the line
Questor is The Telegraph's stock-picking column, helping you decode the markets and offering insights on where to invest. A slow start to Network Rail's CP7 spending and planning cycle, which runs from 2024 to 2029, continues to catch a range of companies off guard. These include equipment hire specialists Speedy Hire and Vp, engineering services company Renew, and signalling expert Tracsis. We were starting to worry that portfolio pick Costain, another infrastructure specialist, could be dragged off course given its exposure to Network Rail and HS2. But a second reassuring trading statement in the space of a month hopefully means we can rest easy. Visibility continues to improve, and as of December, the firm order book was £2.5bn, more than double analysts' forecasts for revenues this year, while Costain stood as preferred bidder on a further £2.9bn of work. Contract wins this year in nuclear energy with Urenco and Sizewell C, as well as Anglian Water as part of its AMP regulatory cycle, are further positive signs, adding weight to the belief that Costain's breadth of business could mitigate any issues with rail, of which the firm is thus far giving no indication. Alex Vaughan, chief executive, and the board continue to assert that Costain can reach a run-rate profit margin of 4.5pc this year, and ultimately 5pc or more. Cash flow remains good and the balance sheet has a net cash pile, since it bears no debt, a pension surplus and only modest lease liabilities. Such is management's confidence, Costain is launching a second £10m share buyback and continues to raise the prospect of a progressive dividend policy. This is all well and good, but we have a paper gain of more than 140pc on the stock, with 3.2p per share in dividends on top, so it is tempting to lock in the gain, especially given the rail industry rumblings. Moreover, that 5pc margin target relies on skilled delivery of complex projects where margins are thin and the room for error limited, as illustrated by the heavy losses suffered on two problematic projects at the turn of the decade. Costain needs to demonstrate that it can improve its project management and derive a higher portion of its sales from more profitable consultancy work. However, the net cash pile, including the pension surplus, represents almost 60pc of Costain's stock market capitalisation, so we have some downside protection. More importantly, there is also still upside potential. A 5pc operating margin on £1.3bn of annual revenues could turn into earnings per share of around 20p, given the net cash balance sheet, a 25pc tax rate and the effects of the second £10m buyback programme on the share count. The still-lowly margin probably means Costain would merit a rating no higher than 10 times earnings, but 10 times 20 suggests a share price of 200p, if all goes to plan, some 40pc up from current levels. Questor says: holdTicker: COSTShare price: 142.4p We are already nicely in the black with challenger bank OSB and there could be more to come in the form of dividends and capital gains, if recent merger and acquisition chatter in the banking sector proves an accurate guide. Granted, we will have to await firm numbers rather than rumour, but talk of a private equity approach for Metro Bank refuses to go away, while Spain's Banco de Sabadell has put TSB up for sale. After a rapid advance, albeit from very depressed levels, shares in Metro Bank now trade at around one times tangible net asset value (Nav) per share. The reported price tag for TSB implies a similar sort of multiple, based on numbers disclosed in the Spanish parent's annual report for 2024. OSB trades on 0.9 times historic tangible book value. It also makes a far higher return on tangible equity than either Metro Bank or TSB. Any new owner of Metro Bank may feel it can make rapid improvements in profits at the lender, given it has a last-reported cost-to-income ratio of 101pc, but they will have to go some to get that indicator down to OSB's 35pc. OSB also offers a higher net interest margin and higher regulatory capital ratios, while the impairment ratio for sour loans is broadly similar. In addition, OSB comes with a forecast dividend yield of some 7pc, according to consensus analysts' forecasts. Granted, investors are demanding a lofty yield in compensation for the risks, since OSB is exposed to the buy-to-let and UK property markets at a time of economic uncertainty, but any hard-and-fast deals for TSB or Metro Bank could provide a steer as to OSB's potential value. Questor says: buyTicker: OSBShare price: 498.6p
Telegraph
9 hours ago
- Business
- Telegraph
This engineer remains on track despite issues on the line
Questor is The Telegraph's stock-picking column, helping you decode the markets and offering insights on where to invest. A slow start to Network Rail's CP7 spending and planning cycle, which runs from 2024 to 2029, continues to catch a range of companies off guard. These include equipment hire specialists Speedy Hire and Vp, engineering services company Renew, and signalling expert Tracsis. We were starting to worry that portfolio pick Costain, another infrastructure specialist, could be dragged off course given its exposure to Network Rail and HS2. But a second reassuring trading statement in the space of a month hopefully means we can rest easy.
Yahoo
4 days ago
- Business
- Yahoo
Costain to design hydrogen storage facility in Cheshire, UK
Infrastructure solutions company Costain is set to undertake the design for the Keuper Gas Storage Project (KGSP), an underground hydrogen storage facility in Northwich, Cheshire, UK. Costain has been contracted by gas storage developer Storengy UK, which said that the work of the infrastructure specialist will guide its final investment decision on the project. The facility will comprise 19 salt caverns and associated hydrogen treatment and transfer facilities. It is set to store around 400 million cubic metres (mcm) of hydrogen. Storengy UK hydrogen director Paul Snary said: 'The Keuper Gas Storage Project is a key initiative which, as part of the wider HyNet system, will help decarbonise both industry and energy generation in the Northwest of England and beyond.' 'This is a long-term project involving many local and regional stakeholders, and we're looking forward to drawing on Costain's expertise and long track record in this space to ensure the engineering and constructability designs meet the requirements, before progressing towards EPCM [engineering, procurement, and construction management] contracts.' The project's first front-end engineering and design (FEED) contract will explore solution mining techniques to create the storage caverns. This process involves pumping water deep underground to dissolve salt and then extracting the resulting brine solution. The salt solution will then be transported to local customers through existing pipelines. The second FEED will concentrate on the necessary gas storage facilities to integrate with the HyNet system, which is a combination of new and existing hydrogen infrastructure across north-west England and North Wales. Costain's design will address the hydrogen's transportation, compression, and storage within the caverns, as well as its reintegration into the HyNet system. The company's work is slated for completion by 2026. According to Costain, it has a history of nearly two decades on the Holford brinefields and experience in constructing gas storage facilities such as the Stublach solution mining plant. The company has also been actively involved in hydrogen infrastructure for over 60 years. Its portfolio includes advisory and delivery projects on hydrogen usage, storage, and production, including a study for Wales and West Utilities on integrating hydrogen refuelling stations into the UK's gas network. Costain natural resources managing director Sam White said: 'This is an exciting project that will enable a transformative hydrogen storage facility to improve the UK's energy resilience and economic prosperity in the north-west of England. 'We have decades of experience in delivering salt cavern gas storage facilities, and we'll apply this knowledge to the rapidly growing hydrogen economy, designing safe and secure storage systems that will be critical to creating a sustainable future." Last month, Costain secured a contract to design a high-assay low-enriched uranium (HALEU) advanced fuels facility for Urenco. "Costain to design hydrogen storage facility in Cheshire, UK" was originally created and published by World Construction Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Se produjo un error al recuperar la información Inicia sesión para acceder a tu portafolio Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información
Bloomberg
27-01-2025
- Business
- Bloomberg
FTSE 100 Live: UK Stocks Set to Start the Week on Back Foot
Here are a few other companies with news this morning: Engineer firm Costain says its adjusted profit for the full-year of 2024 is expected to be in line with expectations after seeing growth in its water and rail projects in the second half. Pharma firm GSK said a prefilled syringe of its Shingrix treatment for shingles has has been accepted for review by the European Medicines Agency. Diversified Energy agreed to buy American oil and gas company Maverick Natural Resources for gross transaction value of about $1.28 billion including assumption of debt. The combined company will have an enterprise value of about $3.8 billion and operate across five regions.
