‘Smart infrastructure’ is the future, says engineer Costain

BRITAIN is driving towards digitally connected “smart infrastructure”, and civil engineer Costain wants to be at the front of the pack, its chief executive has said.

“Future infrastructure in Britain such as highways will not be about new black-top and concrete, but about giving information to drivers digitally and making roads ready for autonomous cars,” said Andrew Wyllie, the boss of the main market-listed engineer.

“There’s a revolution in the use of technology and we are transforming to be at the forefront of that. We are building very few new motorways and railways … it is not all about high-profile, headline projects – despite the rhetoric,” he added as Costain reported strong interim numbers.

“The money is going on improving the security of supply of water and electricity systems, getting services so train passengers know when their train is arriving and being able to buy tickets online for it.” Costain reported revenue in the six months to the end of June up 11.5pc to £847.8m and pre-tax profit almost 40pc higher at £15.7m.

However, this was flattered by considerable costs taken in the previous period on an onerous contract to build recycling and waste management sites in Manchester. Despite winning work on flagship projects such as Crossrail, Mr Wyllie said that lower-profile projects were essential to the company’s future to make sure the UK had the systems in place to support a growing economy.

“We are setting out our stall as the smart infrastructure facilities company,” he added. “Customers are supporting that as 90pc of our business is repeat business.”

Costain, whose order book dropped £200m to £3.7bn – though this was attributed to the timing of contracts – has managed to avoid the woes that have hit some of its peers.

Most notable among these is Balfour Beatty, which is only now turning itself around after years of losses, having struggled to make a profit on contracts. More recently, construction services company Carillion has run into similar difficulties.

Referring to a “revolution” in the way clients were spending their money with the company, Mr Wyllie said that 90pc of contracts were on a “target cost, cost reimbursable” format, which ultimately helps to cut risks to the business.

Costain increased its interim dividend by 10pc to 4.75p. However, shares in the company surrendered early gains to close down 2.25p at 438.75p yesterday.