Costain hails 'another good first half' as it lifts dividend 8%

In the six months to 30 June, reported pre-tax profit increased to £19.5m from £15.7m in the same period a year ago, even as revenue dipped 11.6% to £772.9m. Costain said an increase in group margin led to an 8% rise in underlying operating profit to £22.8m.

The group said it saw a good return from the infrastructure division and a significant improvement in the natural resources business, where a healthier return from the broad range of services is being delivered. It added that the reduction in revenue and increase in the group's underlying operating profit margin reflect the changing mix of the group's activities in line with strategy.

At 30 June, the order book stood at £3.7bn, in line with the same period a year ago and continuing to provide good visibility for future performance. Costain said that while the absolute size of the order book remains unchanged, it is now of "higher quality" as the shape and nature of the individual contracts continues to evolve.

The company, which said it remains on track to deliver full-year results in line with the board's expectations, lifted its interim dividend to 5.15p a share from 4.75p.

Chief executive Andrew Wyllie said: "We delivered another good performance in the first half of the year. The progression in group margin generated growth in underlying operating profit enabling an 8% increase in the interim dividend.

"This performance is due to our differentiation as we evolve into the UK's leading smart infrastructure solutions company. The shape and nature of our activities continues to develop, reflecting our clients' changing needs and their demand for integrated solutions to improve the performance and capacity of their assets."

At 1000 BST, the shares were up 1.9% to 439.50p.