Costain Group (COST) H2 2024 earnings summary

Executive summary

• Adjusted operating profit rose 7.5% to £43.1m, with operating margin at 3.4%, meeting targets set two years ago.

• Adjusted EPS increased 19.7% to 14.6p year-over-year.

• Record forward work increased by £1.5bn to £5.4bn, over four times annual revenue.

• Dividend doubled to 2.4p per share, supported by robust financial health and positive outlook.

• Completed £10m share buyback and concluded transformation programme, shifting focus to continuous improvement.

Financial highlights

• Revenue for the year was £1.25bn, down 6.1% year-over-year due to expected contract run-offs and timing.

• Adjusted operating margin improved to 3.4% (up 40bps year-over-year), with H2 margin exceeding 3.5%.

• Net cash at year-end was £158.5m after investment and share buyback; average month-end net cash £169.8m.

• Adjusted free cash flow was £27.1m, lower than FY23 due to working capital timing.

• Reported profit before tax up 18.1% to £36.5m; reported EPS up 39.5% to 11.3p.

Outlook and guidance

• Approximately 80% of forecast FY2025 revenue secured by end of 2024.

• On track to deliver 4.5% adjusted operating margin in FY2025, with ambition to reach 5% in the future.

• FY25 year-end net cash expected around £180m.

• Step change in performance expected in 2027 as major water and transport contracts ramp up.

• Clear strategy focused on essential infrastructure and long-term market growth.