26th Jan 2026 09:06
(Alliance News) - Costain Group PLC on Monday said a new agreement with the trustees of its defined-benefit pension scheme has cleared the way for increase shareholder returns, including a GBP20 million share buyback this year.
Costain shares were up 9.3% to 177.00 pence early Monday in London.
The Maidenhead, England-based construction and engineering firm said it also intends to almost double its cash dividend payments in 2026 from 2025, starting with the final dividend for 2025.
Costain said it will announce the details of the capital returns with its 2025 annual results on March 10.
The new arrangement with Costain's pension trustees follows the latest three-year review of the scheme. It sees the removal of the dividend parity rule that previously existed. This had required Costain to match any dividends it paid to shareholders with contributions to the pension scheme.
Going forward, there also will be no requirement for an annual assessment of the scheme's funding position, and no further cash contributions are required under the schedule now in place until January 2031.
Costain noted it is in a strong position to make capital returns, with net cash of GBP190 million on December 31, beating market expectations of GP171 million and up from GBP158.5 million a year before.
Turning to 2025 results, the company said adjusted operating profit will be in line with market expectations for GBP46.4 million. This would be up 7.7% from GBP43.1 million in 2024. Adjusted operating margin is expected to be above Costain's run-rate target of 4.5%.
Revenue in the second half was similar to the GBP525 million in the first half, Costain said. This would place the annual total of GBP1.05 billion down 16% from GBP1.25 in 2024.
Costain said revenue in the second half reflects the re-phasing of its work on the HS2 high-speed rail line in the UK and its road project completions.
By Tom Waite, Alliance News editor
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