10th Mar 2026 10:48
(Alliance News) - Costain Group PLC on Tuesday hailed "another strong performance" in 2025, with profit climbing despite a fall in revenue.
In response, Costain shares were 10% higher at 187.80 pence on Tuesday morning in London.
The Maidenhead, England-based construction and engineering company's pretax profit rose 32% to GBP48.2 million in 2025, from GBP36.5 million in 2024. Reported earnings per share rose 23% to 13.9p from 11.3p.
Costain proposed a 3.2p per share final dividend for the year, up 60% from 2.4p. This brings the total payout for the year 75% higher, to 4.2p from 2.0p.
Revenue decreased 16%, however, to GBP1.05 billion from GBP1.25 billion. Costain said growth in its Natural Resources business, where revenue rose across Energy, and Defence and Nuclear Energy, was offset by declines in Transportation, which saw revenue reductions in Road and Rail. In the Rail arm's case, this was "due to the development of a revised schedule for HS2, which moved work into FY26 and future years."
"I am pleased to report another strong performance, with 9% adjusted operating profit growth and a 4.5% adjusted operating margin," commented Chief Executive Alex Vaughan. "Strong cash generation has resulted in a strengthened balance sheet and supports increased shareholder returns, with confirmation that we will proceed with a GBP20 million share buyback programme in FY26 and implement our target dividend cover of 3x adjusted earnings.
"As we return to the FTSE 250...The group is strongly positioned in structurally growing markets where significant long-term investment is being made to meet critical national needs, and where we work in long-term collaborative partnerships with an increasing number of customers.
"Our forward work position has grown by 30% to a record [GBP7.0 billion], almost seven times FY 25 revenue, giving good visibility of future work," Vaughan added.
Looking ahead, Costain stated: "We expect to remain highly cash generative and to deliver progress in both revenue and adjusted operating profit in FY26 with an adjusted operating margin of around 4.0% for the full year, in line with market expectations...as we invest in the business to support the attractive growth opportunities."
Costain also reaffirmed its ambition to deliver operating margins in excess of 5.0%, in 2027 "and beyond".
Also on Tuesday, Costain announced the launch of a buyback programme worth up to GBP20 million. It expects the two tranches to end by December 31.
By Emma Curzon, Alliance News reporter
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