LONDON (ShareCast) - (Sharecast News) - Shares in Costain plummeted on Wednesday despite the construction and engineering firm hiking its dividend, as revenues in the first half dropped by almost a fifth.
The company reported revenues of £525.4m for the six months to 30 June, down 17.8% over last year, as growth in the Natural Resources division was outweighed by falls in Transportation from expected road project completions and a rephased schedule from HS2.

However, Costain said that an improved quality of contracts and strong operational execution helped drive a 3.1% increase in adjusted operating profit to £16.8m.

The adjusted operating margin rose to 3.2% from 2.5% last year, with the company "confident" in delivering its run-rate target of 4.5% over 2025.

The company said it ended the half with a "strong balance sheet", though net cash declined to £144.9m from £158.5m at the end of 2024. However, this is expected to improve to £170m by the year-end.

The interim dividend was raised to 1.0p, up from just 0.4p last year, though this reflected a more balanced dividend split between the first and second halves.

"We continue to win new work and add new customers in growth markets that provide essential infrastructure, expanding our forward work position to £5.6bn, more than four times FY 24 revenue. We have already secured 90% of our forecast revenue for the year and our bidding activity levels remain high," said chief executive Alex Vaughn.

Looking ahead, the company said that improvements in the market outlook and its positioning "underpin our confidence in delivering on our expectations for further progress in FY 25 and FY 26, with a step change in performance expected in FY 27 and beyond".

Despite the bullish outlook, shares were down 15.5% at 138p by 0905 BST.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE