Costain Shares Jump: Secures £1bn Long-Term Programme With Sellafield

Costain Group (LON: COST) said Monday that it has been awarded a substantial contract by Sellafield Ltd, positioning the company favorably within the nuclear decommissioning market.

The agreement, worth up to £1 billion, designates Costain as the Utilities Delivery Partner within Sellafield's broader Infrastructure Delivery Partnership (IDP).

Costain shares jumped more than 8% following the news.

The contract spans an initial nine-year term, with an option for extension by a further six years.

Costain will be responsible for refurbishing and replacing critical utility distribution systems at Sellafield, supporting the site's decommissioning programme.

The total value of Sellafield's IDP is estimated at £2.9 billion, indicating the scale of investment in the UK's nuclear infrastructure.

This award follows previous contract wins for Costain in the civil nuclear energy market, including projects at Sizewell C and Urenco.

Government support for the safe decommissioning of the UK's nuclear legacy underpins the long-term nature of these projects, providing stability and growth opportunities for companies like Costain.

The financial implications of the Sellafield contract are considerable. A potential £1 billion revenue stream over the contract's lifespan significantly strengthens Costain's order book and provides increased revenue visibility.

The contract award is likely to act as a catalyst for positive price action in Costain's shares. The size and duration of the contract provide a strong foundation for future growth, potentially attracting increased investor interest.

According to Alex Vaughan, chief executive officer of Costain, “This new contract award with Sellafield… is testament to our strategy of developing long-term relationships with tier 1 customers, building strong and collaborative partnerships, broadening our service offering, and maintaining consistency and continuity of workflows.”