Inflation busting contract clauses help boost Costain profits

Pre-tax profits during the six months to June 30 2022 hit £11.2m from £9.1m last time as turnover rose to £665.2m from £556.8m.

Tighter tendering and risk controls alongside inflation contract clauses paid-off for Costain as operating margins stayed steady at 2.1%.

Alex Vaughan, Chief Executive Officer,said: “In the first half of the year we delivered a strong operating performance reflecting volume increases and the inflation recovery mechanisms built into our contracts.

Despite material availability and inflation challenges, we have managed the supply chain pressures effectively, while delivering a robust operational performance with new contracts being won on attractive commercial terms with appropriate risk.”

Costain was rocked by a site death at its Gatwick Airport station job last month when a worker employed by structural works subcontractor Kilnbridge died.

Vaughan said: “In July, the company experienced a fatality on one of its Rail projects. We are shocked and saddened by this tragic incident and we, and our subcontractor, are working with the authorities and our client in an investigation to fully understand its causes. We are focused on supporting the family and on the wellbeing of our colleagues.”

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