Costain has underpinned its confidence in its 2025 financial year expectations, as its operating profit increased by 3.1% to £16.8m in the six months to 30 June.

The construction engineering firm said this was a result of the quality of contracts and a strong execution of its work.

In this period, Costain's earnings per share dropped slightly from 5.6 pence in H1 2024 to 5.5 pence, with its adjusted operating profit increase offset by lower net finance income.

Furthermore, its revenue dropped by 17.8% as a result of a reduction in its transportation revenue from expected road completions and a re-phased schedule from HS2, despite a growth in its natural resources division.

Chief executive officer at Costain, Alex Vaughan, said: "Growth in adjusted operating profit and margin reflects the improving quality of our contract portfolio, and we remain confident that we will deliver our adjusted operating margin run-rate target of 4.5% during FY25, building on the significant growth in adjusted operating profit achieved since FY21.

"Our strong net cash position, progression in our dividend and share buyback programme are creating substantial value for shareholders.

"We continue to win new work and add new customers in growth markets that provide essential infrastructure, expanding our forward work position to £5.6bn, more than four times FY24 revenue. We have already secured 90% of our forecast revenue for the year and our bidding activity levels remain high."

Looking ahead, the engineering firm said it sees momentum in its chosen markets following greater clarity over the Government’s commitment to investment in key sectors.

Costain stated that while it remains mindful of the near term macroeconomic and geopolitical environment, and the political consequences of Government spend phasing decisions, it remains confident on delivering its expectations.

Vaughan added: "The Government's new infrastructure strategy and infrastructure pipeline, together with recent regulatory determinations in water, energy and aviation, provide clarity and confidence in the significant growth opportunities in our target markets. We are delivering our strategic priorities, investing in the business to support these attractive growth opportunities and are increasingly confident in the group's growth prospects."

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