Costain doubles dividend as pipeline jumps
Costain has doubled its full-year dividend after reporting a record increase in forward work.
On Tuesday, the London-listed construction firm said it would increase its dividend per share from 1.2p to 2.4p.
Earnings per share also rose by nearly a fifth to 14.6p, up from 12.2p the year prior.
It came as Costain’s forward work position increased by a record £1.5bn to £5.4bn, with a number of significant contract wins in water and rail.
Shares jumped nearly five per cent in early deals.
The news followed a similar update from peer Kier. The group hiked its dividend by a fifth after its order backlog increased to a record £11bn.
The London-listed construction firm said it would pay investors an interim dividend of 2p, up 20 per cent from last year’s 1.67p.
On an adjusted basis, Costain’s operating profit rose 7.5 per cent to £43.1m. Revenue declined 6.1 per cent to £1.3bn which Costain said reflected the timing of contract starts.
“The record growth in forward work position is expected to deliver further progress in full-year 25 and full-year 26, followed by a step change in full-year 27 performance,” Alex Vaughan, chief executive officer, said in a statement.
“The quality, balance and better risk profile of our forward work position of £5.4bn across our two divisions, together with continued investment in our chosen markets, gives us increasing visibility on future revenue and margin.
He added: “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.”
Shares are down 2.8 per cent this year to date.
“While we remain mindful of the near term macro-economic and geopolitical conditions, and their importance to Government priorities and the timing of spending, we are well positioned for further cash generation and progress,” the company told shareholders.