Costain Shares Jump as Interim Results Confirm Growth Path and Dividend Doubles

Shares in Costain Group (LON: COST) rose sharply on Thursday after the UK infrastructure specialist posted strong half-year results and reaffirmed full-year guidance, extending a rally that has taken the stock up more than 8% over the past fortnight to around 219.5p.

The FTSE-listed contractor reported revenue up 3.4% to £543.1m for the six months to 30 June 2026, with adjusted operating profit rising 3.0% to £17.3m and margin held at 3.2%. Adjusted earnings per share climbed 3.6% to 5.7p, marking a sixth consecutive year of profit growth.

Investors welcomed a doubling of the interim dividend to 2.0p, after the board cut its target dividend cover to 2.5 times adjusted earnings from 3 times, alongside continued progress on a £20m share buyback. Net cash stood at a healthy £164.4m despite higher shareholder returns.

Chief executive Alex Vaughan said the group was “at a key inflection point,” with forward work maintained at a record £7.0bn — up 67% over six years and covering 91% of consensus revenue forecasts for both FY26 and FY27.

New wins included National Grid’s “Great Grid Upgrade,” reservoir programmes with Thames Water and Anglian Water, and expanded work at Heathrow.

Natural Resources revenue jumped 13.3%, led by Water as the AMP8 investment cycle shifts from design to construction, while Transportation revenue dipped 3.2% on the completion of legacy road framework contracts, though management expects growth to resume in the second half.

Costain reiterated that FY26 revenue, profit and margin remain on track, with management pointing to a “step change” in performance expected in FY27, underpinned by rising investment across water, energy, defence and aviation infrastructure markets.