Costain bosses take 30% pay cut
Alex Vaughan, chief executive of Costain
The board and senior leadership team of Costain have agreed to take a 30% reduction in salary and directors’ fees for up to three months amid the coronavirus crisis.
The firm is also planning to furlough an unspecified number of workers whose work has been affected by the pandemic.
Costain, which derives 95% of its revenue from government agencies or regulated businesses, said it was continuing its activities “at safe levels of operation” for a range of highways, local authority and water utilities work. These services represent around 50% of its annual revenue.
But work on major London projects like Crossrail, the HS2 enabling works and Thames Tideway have all been paused due to the difficulties for workers travelling safely in the capital. On-site construction represents around 30% of the company’s revenue, with home-based activities continuing on these projects representing 10% of revenue.
As at 26 March 2020, Costain had £40m of cash, a £90m share of cash in project bank accounts and joint operations and £116m of drawn debt, as well as a further £71m of bank debt facilities.
Chief executive Alex Vaughan said: “I would like to thank everyone who is supporting our business through this challenging period and in particular all our workforce who continue to work so professionally, as they always do, in supporting each other and meeting our clients’ critical needs.
“We are continually monitoring and implementing the necessary measures to safeguard those who continue to work on essential projects across the UK. Our priorities remain their safety and wellbeing, doing the right thing for society, continuing to support our clients and protecting the financial strength of the group.
“I am confident that the steps we are taking to manage our business through this uncertainty will ensure we are well placed to respond strongly once our operations can fully resume.”