Costain Group share price: what's the outlook as new strategy is announced?
The construction company has set its sights on a 7% margin after announcing it plans to transform the business into the ‘Uber of construction’ by using disruptive technologies.
Costain has unveiled a major turnaround plan that aims to transform the company into the ‘Uber of construction’, with the five-year strategy promising to increase the group’s margins to between 6% - 7%.
The ambitious new plan, which looks to harness the power of ‘disruptive technologies’, comes after the company’s share price plummeted more than 38% following its profit warning last week.
Can Costain become the ‘Uber of construction’?
As part of the company’s ‘leading edge’ growth strategy, Costain plans to expand higher-margin asset management, digital solutions and consultancy, with the aim of increasing their contribution to group profit from 35% to 55% by 2024.
‘Costain aims to shape the future infrastructure we have in UK, in the same way that Apple has shaped the way we use our mobile phones and the way we buy music,’ Costain CEO Alex Vaughn said.
‘In the same way that Amazon used digital technology to transform the way retail services are provided, we are today and will increasingly use technology to enhance the performance of our service,’ he added.
The company is not only focused on improving its technology offering but is also looking to restrict the business into four key markets, including Transportation, Water, Energy and Defence.
Practise trading Costain and other stocks by opening an IG Demo Account.
Costain looks to rebound after major contract delays
Shares in the company fell sharply on Friday last week after its profit warning which was precipitated by a string of delayed or cancelled contracts that hurt its revenues.
Costain was hit by delays to works on the HS2 railway project, as well as the M6 smart motorway contract, while the Welsh government cancelled its £1.4 billion M4 project over fears the works would damage the habitat of local wildlife.
‘Despite delays to the timing of certain contract start dates and new awards, our markets are strong, as evidenced by the breadth of our new contract awards in the first half,’ Vaughan said.
‘We have a strong balance sheet, profitable operations and a broad range of capabilities to support the growth of the business. Costain is well placed to secure the opportunities ahead of us,’ he added.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See your opportunity?
Seize it now. Trade over 17,000+ markets on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
