13th Aug 2026 11:05
(Alliance News) - Costain Group PLC doubled its interim dividend as it reported on Thursday higher sales and profit in the first six months of 2026.
The London-based firm provides infrastructure construction for the transport, water, energy and defence sectors.
Pretax profit rose 5.5% to GBP19.2 million in the six months ended June 30 from GBP18.2 million a year prior.
Basic earnings per share grew 5.6% to 5.7 pence from 5.4p.
Revenue increased 3.4% to GBP543.1 million from GBP525.4 million, with 13% growth in the Natural Resources division offsetting a 3.2% decline in the Transportation arm.
Natural Resources saw increases across all three sectors of Water, Energy, and Defence & Nuclear Energy.
In Transportation, Integrated Transport revenue grew, while Rail revenue was stable as work on the HS2 Euston tunnels progressed. This was offset by a reduction in Road revenue given the prior year period included the completion of several Regional Delivery Partnerships framework projects.
Costain expects Road revenue to return to growth in the second half of 2026 and into financial 2027, as it progresses into the construction phase on work won with local authorities and the M60 and M5 strategic road network projects.
Chief Executive Alex Vaughan said the first half performance, "with revenue growth and further growth in operating profit, and our robust balance sheet, has supported a significant year-on-year increase in shareholder returns."
Costain doubled its interim dividend to 2.0p per share from 1.0p, reflecting its new target dividend cover of 2.5 times adjusted earnings. It was previously 3x adjusted earnings.
Looking ahead, Costain said it expects revenue growth in the second half of 2026 when compared with the first.
Its forward work position was maintained at a record GBP7.0 billion when compared to the end of 2025, and up 67% over six years. This provides visibility over 91% of both FY26 and FY27 consensus forecast revenue, Costain said.
Company-compiled consensus predicts revenue of GBP1.23 billion in 2026, GBP1.40 billion in 2027, and GBP1.49 billion in 2028. It was GBP1.05 billion in 2025.
Shares in Costain were up 5.0% to 230.50p each in London on Thursday.
By Jeremy Cutler, Alliance News reporter
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