Costain Group (COST) H2 2025 earnings summary

Executive summary

• Delivered strong financial performance in FY 2025, with profit and cash growth supported by a high-quality contract portfolio and expert execution.

• Returned to the FTSE 250 in March 2026, reflecting improved market standing and consistent profit and cash growth over five years.

• Achieved a record forward work position of £7 billion, supporting future growth and revenue visibility for 2026 and 2027.

Financial highlights

• Adjusted operating profit grew by 9.3% to £47.1 million, with margin up 110bps to 4.5%, slightly ahead of consensus; five-year CAGR of 12%.

• Revenue was £1,045.7 million, down 16.4% year-over-year, mainly due to planned Transportation reductions and project completions.

• Net cash at year-end was £189.3 million, up from £158.5 million.

• Dividend per share increased to £0.042 (4.2p), up 75% from FY 2024; £10 million share buyback completed.

• Announced a £20 million share buyback for FY 2026, following £10 million buybacks in 2024 and 2025.

Outlook and guidance

• Expect continued revenue and profit growth in FY 2026, with a step change in performance anticipated in FY 2027 and beyond.

• Approximately 90% of forecast revenue for FY 2026 already secured; strong pipeline and high win rates.

• Targeting industry-leading operating margins in excess of 5% longer term; FY 2026 margin targeted around 4.0%.

• FY 2026 net cash expected to be around £175 million after enhanced shareholder returns.

• Implementing a dividend cover of 3x adjusted earnings.