Latest news with #Costain
Daily Mail
25-07-2025
- Business
- Daily Mail
Small Cap Movers: Surface Transforms finally finds second gear
Has Surface Transforms finally found second gear? Based on the latest update from the maker of carbon ceramic brakes, the answer is a guarded yes. However, the share price move, up around 60 per cent over the week, suggests the market is more bullish on the company's prospects. The catalyst for the renewed enthusiasm was a trading update indicating that recent operational and funding woes are now firmly in the rearview mirror. Revenue rose 72 per cent to £8.1million in the first half of 2025, driven by improved manufacturing yields and higher output. Gross cash stood at £1.2million at 30 June, supported by customer advances totalling £12.9million. 'Key customers have and continue to be highly supportive of the company, and we remain hugely appreciative. The company remains in negotiations regarding the settlement of these advances, with repayments expected to commence in the second half of 2025,' it said. At 1.35p, the stock is down 18 per cent over the last year and has a long way to recover to the highs of early 2021 when it was worth almost 70p. Turning to the wider market, it was a subdued week for the AIM All-Share, which crept up just 0.3 per cent to 775.94. Its benchmark, the FTSE 100, rose 1.3 per cent as it broke the 9,000 level for the first time. Among the week's winners, EnergyPathways jumped 30 per cent after adding Siemens Energy and Costain to its partnership roster. The company is developing the Marram Energy Storage Hub, or MESH, an ambitious project 11 miles off the Lancashire coast. MESH is designed as a multi-technology underground battery. If built as planned, it would store up to 20 terawatt-hours, about 7 per cent of the UK's annual electricity demand. The facility will combine three storage methods: natural gas, compressed air and hydrogen. This could prove important as the UK remains reliant on intermittent renewables and gas imports. Proactive will have a deeper dive on EnergyPathways in the coming weeks. Futura Medical, the maker of a fast-acting erectile function gel, advanced 26 per cent in the last five trading days. The stock has nearly doubled in value since the interim appointment of Lex Duggan, the former head of corporate development at Alliance Pharma. Now to the week's litany of losers. It was a good news, bad news week for investors in Jangada Mines. The good news is that it is buying into Brazil's Paranaíta Gold Project. The bad news is that it is raising £800,000 via a discounted and dilutive share sale. Shares ended Friday 47 per cent lower. A similar story played out at Union Jack Oil, which lost 40 per cent after announcing plans to raise £2million to fund growth in the US. So far, this has been a successful venture for David Bramhill and his team. It is worth noting that the funding taps are now fully open for smaller companies, although the cost of capital remains high and, in some cases, punitive. For AOTI, the damage was not self-inflicted. The wound care group warned of weaker growth for the remainder of 2025, citing continued disruption from US government healthcare initiatives. While revenue is expected to be up 18 per cent to around $31million, growth slowed sharply in the second quarter. The company expects full-year revenue growth in the mid-teens, with adjusted EBITDA margin in the low double digits, as headwinds from cost-cutting at the US Department of Veterans Affairs and Medicaid persist. Finally, the two leaders in helium extraction are making significant progress that is yet to be fully reflected in their valuations. Helium One last week secured a mining licence for its Southern Rukwa development in Tanzania and raised £10million to develop the project and assets in the US. On Friday, Helix Exploration released encouraging news from its Inez-1 well at the Rudyard field in Montana. The company drilled and tested the well, identifying around 140 feet of good-quality rock showing clear signs of gas, what the team calls a 'gas effect', in the Souris and Red River formations. Using petrophysical logs, high-tech measurements taken inside the well, Helix compared Inez-1 to its earlier Linda-1 discovery nearby. The results are promising, with the rocks matching up closely, suggesting further gas potential, according to SP Angel. 'A good operational update from Helix,' the broker added. Flow testing begins in early August, so stay tuned.
The Star
08-07-2025
- Business
- The Star
UK builders find support in Labour's plan to upgrade roads, railways
LONDON: British infrastructure firms stand to benefit from the Labour government's spending plans for roads, railways and energy projects, with strong order books expected to feed into improving outlooks during the upcoming earnings season. Companies including Balfour Beatty Plc, Costain Group Plc, Morgan Sindall Group Plc and Kier Group Plc are lined up to win orders after Chancellor of the Exchequer Rachel Reeves announced £113bil (US$154bil) of funding for public infrastructure across the United Kingdom last month. That includes £39bil to build affordable homes, £14bil for the Sizewell C nuclear project in Suffolk and £15bil for new transport infrastructure across the north and midlands. 'The general pitch will be quite healthy,' Investec Bank Plc analyst Aynsley Lammin said. He highlighted that an array of energy, water and housing contracts is already in the works, while the commitments made in Reeves' spending review will brighten the outlook and provide visibility on a steady order pipeline. An improvement would be welcome. UK commercial building activity has been in contraction territory since January, according to S&P Global's overall construction purchasing managers' index. The confidence level edged up to 48.8 in June, marking the slowest decline in construction output this year and reversing the downward trend. A reading below 50 indicates a reduction in activity. 'It might be too early for upgrades, but the risk is definitely on the upside,' Lammin said. 'At the very least it will be a strong underpinning, with expectations that margins and volumes will accelerate from next year.' Order books for listed UK infrastructure firms are at or near record levels already, according to Deutsche Numis analyst Jonathan Coubrough. While government spending pledges tend to take several years to convert into construction activity, secured projects like Sizewell C can have a faster impact, Coubrough said. He expects the nuclear project to contribute to solid order-book growth in the upcoming earnings season, particularly for Balfour Beatty, which was awarded contracts worth as much as £400mil a year until 2030. High-speed rail project HS2 and BP Plc and Equinor ASA's joint venture Net Zero Teeside Power – a gas-fired power station with carbon capture – will also support profit gains over this year and the next for Balfour Beatty, Bloomberg Intelligence analyst Sonia Baldeira wrote in a note. The London-based firm is the 'clear market leader in energy and power markets,' and should see the fastest growth among its peers this year as power firms increase their grid investments, Coubrough said. He expects Morgan Sindall, Kier and Costain to benefit from upgrades to the UK's water infrastructure. Costain in particular is set to be a major beneficiary of AMP8, a regulatory overhaul of the UK water industry that aims to modernise infrastructure and address environmental challenges, according to Investec's Lammin. The company is working to deliver 260kms of new pipelines to enhance drought resilience in eastern England, and recently entered an agreement with United Utilities Group Plc to upgrade water and wastewater treatment sites as part of a £3bil project that will last until 2030. Morgan Sindall is 'exceptionally well positioned' to deliver on the government's affordable housing commitments, Lammin said. It already raised its outlook for 2025 last month, with its construction division set to outperform revenue and profit expectations. Kier, which specialises in road, prison and hospital infrastructure, lifted its medium-term operating profit margin goal, showing confidence in its pipeline. Kier's ongoing turnaround is 'delivering solid results,' with a record £11bil of orders in the fiscal first half supporting its move toward growth after a period focused on paring debts, BI's Iwona Hovenko said. Still, delays in planning approval, difficulties in securing funding and inflationary pressures might complicate the delivery of such projects and the steady earnings growth that is expected to come with them. 'The administrative process of planning and getting these things funded takes time and usually longer than everybody hopes for,' Lammin said. The biggest obstacle is engineering capability and human resources, according to Coubrough, particularly for complex projects such as power grid upgrades and tunnel projects. The shortage of skilled workers can in turn increase construction costs, worsening funding challenges. — Bloomberg
Business Times
07-07-2025
- Business
- Business Times
UK builders find support in Labour's plan to upgrade roads and railways
[LONDON] British infrastructure firms stand to benefit from the Labour government's spending plans for roads, railways and energy projects, with strong order books expected to feed into improving outlooks during the upcoming earnings season. Companies including Balfour Beatty, Costain Group, Morgan Sindall Group and Kier Group are lined up to win orders after Chancellor of the Exchequer Rachel Reeves announced £113 billion (S$196.4 billion) of funding for public infrastructure across the UK last month. That includes £39 billion to build affordable homes, £14 billion for the Sizewell C nuclear project in Suffolk and £15 billion for new transport infrastructure across the north and midlands. 'The general pitch will be quite healthy,' Investec Bank analyst Aynsley Lammin said. He highlighted that an array of energy, water and housing contracts is already in the works, while the commitments made in Reeves' spending review will brighten the outlook and provide visibility on a steady order pipeline. An improvement would be welcome. UK commercial building activity has been in contraction territory since January, according to S&P Global's overall construction PMI. The confidence level edged up to 48.8 in June, marking the slowest decline in construction output this year and reversing the downward trend. A reading below 50 indicates a reduction in activity. 'It might be too early for upgrades, but the risk is definitely on the upside,' Lammin said. 'At the very least it will be a strong underpinning, with expectations that margins and volumes will accelerate from next year.' Order books for listed UK infrastructure firms are at or near record levels already, according to Deutsche Numis analyst Jonathan Coubrough. While government spending pledges tend to take several years to convert into construction activity, secured projects like Sizewell C can have a faster impact, Coubrough said. He expects the nuclear project to contribute to solid order book growth in the upcoming earnings season, particularly for Balfour Beatty, which was awarded contracts worth as much as £400 million a year until 2030. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up High-speed rail project HS2 and BP and Equinor ASA's joint venture Net Zero Teeside Power – a gas-fired power station with carbon capture – will also support profit gains over this year and the next for Balfour Beatty, Bloomberg Intelligence analyst Sonia Baldeira wrote in a note. The London-based firm is the 'clear market leader in energy and power markets,' and should see the fastest growth among its peers this year as power firms increase their grid investments, Coubrough said. He expects Morgan Sindall, Kier and Costain to benefit from upgrades to the UK's water infrastructure. Costain in particular is set to be a major beneficiary of AMP8, a regulatory overhaul of the UK water industry that aims to modernise infrastructure and address environmental challenges, according to Investec's Lammin. The company is working to deliver 260 kilometres of new pipelines to enhance drought resilience in eastern England, and recently entered an agreement with United Utilities Group to upgrade water and wastewater treatment sites as part of a £3 billion project that will last until 2030. Morgan Sindall is 'exceptionally well positioned' to deliver on the government's affordable housing commitments, Lammin said. It already raised its outlook for 2025 last month, with its construction division set to outperform revenue and profit expectations. Kier, which specialises in road, prison and hospital infrastructure, lifted its medium-term operating profit margin goal, showing confidence in its pipeline. Kier's ongoing turnaround is 'delivering solid results,' with a record £11 billion of orders in the fiscal first half supporting its move toward growth after a period focused on paring debts, BI's Iwona Hovenko said. Still, delays in planning approval, difficulties in securing funding and inflationary pressures might complicate the delivery of such projects and the steady earnings growth that is expected to come with them. 'The administrative process of planning and getting these things funded takes time and usually longer than everybody hopes for,' Lammin said. The biggest obstacle is engineering capability and human resources, according to Coubrough, particularly for complex projects such as power grid upgrades and tunnel projects. The shortage of skilled workers can in turn increase construction costs, worsening funding challenges. Another headwind, more short-term and unpredictable, is the macro backdrop, Lammin said, referring to the bond market's nervous reaction to the recent speculation about a potential departure of Reeves as Chancellor. The sharp market moves brought to the fore the fragility of Britain's economic position, as the government attempts to balance ambitious spending – in infrastructure and beyond – with fiscal discipline. Bond and equity markets recovered some of their losses after Prime Minister Keir Starmer quashed the speculation, giving Reeves his full backing. BLOOMBERG
Yahoo
24-06-2025
- 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
24-06-2025
- 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.
