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RNS Number : 2332E  Costain Group PLC  14 May 2026

 

Costain Group PLC

 14 May 2026

AGM Trading Update

 

Trading in line with expectations, good progress towards step change in
performance in FY 27

 

Ahead of today's Annual General Meeting ("AGM"), Costain Group PLC ("Costain"
or the "Group") announces a trading update for the period 1 January 2026 to
date ("the period").

Trading in line with expectations

Trading for the period remains in line with the Board's expectations. The
Group continues to expect revenue growth and further growth in adjusted
operating profit in FY 26, alongside an industry-leading adjusted operating
margin of around 4.0% for the full year.

The Group is making good progress towards the expected step change in
financial performance in FY 27 and beyond. Contract mobilisations and
increased activity levels, reflecting an acceleration in customers' investment
spending plans, are expected to build during the second half of FY 26. As a
result, and as previously indicated, FY 26 revenue and adjusted operating
profit is expected to be second half weighted.

Costain remains highly cash generative with a strong balance sheet. The Group
continues to expect its FY 26 net cash position to be approximately £175m,
after the partial unwind of historic working capital benefits, the ongoing
£20m share buyback programme and an almost doubling of dividend cash
payments. As at 13 May 2026, the Group had purchased a total of 2.1m shares
for an aggregate consideration of £4.0m under the share buyback programme.

Following the announcement on 28 May 2025 of the refinancing of its bank and
bonding facilities, Costain has now exercised its option to extend its £100m
revolving credit facility (RCF) and £295m bonding facilities by a further
year, to September 2030. The RCF remains undrawn.

Strong momentum in the Group's chosen markets

The Group's chosen markets continue to demonstrate highly attractive growth
opportunities, with recent positive developments including:

·    United Utilities, a significant and long-standing customer with a
contract extending to the end of AMP9, has announced that it will increase its
AMP8 capital investment programme by £2.5bn (c.30%) to £11.5bn.

·    The Department for Transport has announced its Road Investment
Strategy 3, the largest single investment in the strategic road network in
recent times that provides £27bn of investment over the five years to 2031.
This includes a £1bn Structures Fund for local authorities to fix England's
bridges, flyovers and tunnels.

One important element of the Group's strategy is to expand, diversify and
balance its customer base, enhancing the scale and resilience of the business.
This has resulted in significant growth in the value of forward work with
private and regulated customers in recent years. The value of forward work
with central government customers has remained stable. At the end of FY 25,
Costain's £7bn forward work position was split as follows:

·    51% with private and regulated customers, up from 30% two years ago

·    31% with central government customers, down from 64% two years ago

·    17% with devolved government customers, up from 6% two years ago

During the period, the Group has continued to win a range of work across its
chosen markets (see below) and, after allowing for the revenue delivered in
the period, retains a forward work position that is broadly consistent with
the £7bn FY 25 year end position. The pipeline of bidding opportunities
remains strong across all sectors.

Private and regulated customer wins:

·    London Gatwick Airport: two capital projects frameworks and a
separate contract to upgrade and expand the North Terminal international
departure lounge

·    Severn Trent Water: contract to upgrade critical sewage treatment
infrastructure at Rugby

·    Thames Water: new AMP8 work has commenced across nine sites

·    Port of Dover Harbour Board (new Transport customer): place on
six-year utilities infrastructure framework

·    Manchester Airports Group: five-year strategic advisory consultancy
framework, building on the separate biodiversity studies consultancy contract
won last year

·    National Grid (new Energy customer): contract to upgrade the Landulph
substation, part of the 'Great Grid Upgrade'

 

Devolved government customer wins:

·    Procure Partnerships (new Transport customer): place on the North
West Contractor Framework, delivering infrastructure projects across the north
west region

 

Central government customer wins:

·    National Highways: contract to design and build a new junction on the
M5

·    Government Commercial Agency: place on the Construction Professional
Services 2 consultancy framework

The next scheduled trading announcement will be the Group's half year results
on 13 August 2026.

Enquiries:

 

Investors and
analysts
matt.jones@costain.com

Matt Jones,
Costain
                                +44 (0) 7860
922 341

 

Financial media -
Headland
costain@headlandconsultancy.com (mailto:costain@headlandconsultancy.com)

Andy
Rivett-Carnac
+44 (0) 7968 997 365

Charlie
Twigg
+44 (0) 7946 494 568 (tel:+44%20(0)79%204649%204568)

 

Notes to editors

 

Costain improves people's lives by creating connected, sustainable
infrastructure that enables people and the planet to thrive. Through the
delivery of predictable, best-in-class solutions across the transport, water,
energy and defence markets, we are creating a sustainable future and securing
a more prosperous, resilient and decarbonised UK.

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