11th Mar 2025 14:31
(Alliance News) - Costain Group PLC on Tuesday saw its shares rise 7.7% as it posted a significant increase in profit despite weaker revenue in 2024.
The London-based construction and engineering firm said pretax profit climbed 18% in 2024 to GBP36.5 million from GBP30.9 million the prior year.
Shares in Costain were up 7.7% at 112.00 pence on Tuesday afternoon in London.
This occurred despite a 6.1% contraction in revenue over the period to GBP1.25 billion from GBP1.33 billion, which Costain said reflected the timing of contract starts and completions in Transportation.
Transportation revenue fell 10% to GBP845.8 million from GBP943.1 million, owing to lower volumes in Road due to the completion of some contracts and delays to commencing a new contract.
Natural Resources revenue picked up 4.2% to GBP405.3 million from GBP388.9 million, with Costain crediting the improvement to growth in Defence & Nuclear Energy and in Water.
Costain's improved profitability can be attributed to a reduction in costs. Cost of sales fell 6.5% to GBP1.15 billion from GBP1.23 billion and administrative expenses fell 7.4% to GBP72.2 million from GBP78.0 million.
Costain proposed a final dividend of 2.0 pence per share, a significant uplift on 0.8p the prior year. It doubled its total dividend for the year to 2.4p from 1.2p.
Looking to the new financial year, Costain noted that it has achieved a "record increase" in its forward work position to GBP5.4 billion, up GBP1.5 billion, or 38%, from GBP3.9 billion the prior year.
Its forward work position refers to its combined order book and preferred bidder book.
Costain said its forward work position, together with growth on existing frameworks, provides it with increasing visibility and confidence to continue delivering progress over the next two years
The firm said it had around GBP950 million in group revenue secured for 2025 at the end of the year, representing around 80% of its forecast revenue for the period.
Chief Executive Alex Vaughan commented: "The record growth in forward work position is expected to deliver further progress in FY25 and FY26, followed by a step change in FY27 performance. The quality, balance and better risk profile of our forward work position of GBP5.4 billion across our two divisions, together with continued investment in our chosen markets, gives us increasing visibility on future revenue and margin.
"We continue to deliver improvements and invest in the business, and are increasingly confident in the group's growth prospects, with our strong cash position and cash generation enabling the group to enhance returns to shareholders."
By Christopher Ward, Alliance News reporter
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