Costain’s £10m bill for roof fix slashes profits

Builder Costain bore the scars of repair works on a legacy project on Wednesday as first-half profits fell by more than half.

The firm was forced to pay out £9.7 million for works on the roof of the huge national synchrotron laboratory in Oxfordshire, which it completed in 2006.

This financial hit, as well as delays to other projects, triggered a profit warning which virtually halved the share price in June.

Pre-tax profits sank from £19.9 million to £8.4 million for the six months to June 30.

The shares bounced 12%, or 17.9p, to 163.3p today as Costain remains on track to meet lowered expectations, although the shares are still down 50% this year.

Chief executive Alex Vaughan is also hoping to capitalise on HS2 main works when the project finally gets political approval.

Costain’s results came as the Government announced a formal review into the HS2 scheme, with Transport Secretary Grant Shapps making a final decision by the end of the year.

The firm has two contracts on the main works if the green light is given. Broker Peel Hunt said Costain was “attractively positioned to benefit from increasing infrastructure investment”.