Costain unveils £10m buyback as first-half profits rise

Costain has announced a £10m share buyback programme as it reported higher profits for the first half on the back of improved margins and a better product mix.

The British construction and engineering firm made an adjusted operating profit of £16.3m for the six months to 30 June, up 8.7% on last year, with the adjusted operating margin rising by 20 basis points to 2.5%.

This was driven mainly by an "improved performance in Transportation resulting from a better margin mix derived from newer contracts and increased volumes, and margin in Natural Resources, which has a greater mix of consultancy services", the company explained.

Looking ahead, Costain said it was on course to hit its margin targets over 2024 and 2025 of 3.5% and 4.5%, respectively.

Revenues over the first half totalled £639.3m, down 3.8% year-on-year as growth in Natural Resources was offset by declines in Transportation, where there were reductions in road volumes due to the completion of certain projects, and in rail due to the completion of main works at Gatwick Station.

"As a result of our strong performance and valued long-term relationships with our customers, we have increased our forward work position to a very healthy £4.3bn at the half year, with contract wins across all our sectors," said chief executive Alex Vaughan.

"As a result of our confidence in our long-term prospects, and our strong cash position, we have today announced a £10m share buyback which will commence with immediate effect."