Pre-tax profit at major infrastructure contractor Costain has soared by almost 20 per cent.<\/p>\n
The firm\u2019s chief executive Alex Vaughan said\u00a0<\/em>the increase was \u201cbuilt on four years\u2019 worth of work\u201d and a \u201cclear strategy\u201d.<\/p>\n Pre-tax profit was up from \u00a330.9m to \u00a336.5m in the year to 31 December 2024, while Vaughan also pointed to \u201crecord growth\u201d in Costain\u2019s<\/a> year-end order book.<\/p>\n This is now worth \u00a35.4bn, an increase of \u00a31.5bn compared with 2023, the accounts said.<\/p>\n \u201cWhat\u2019s really good is the confidence that we\u2019ve now got, that when we get to 2027 there\u2019s going to be a step change in the volume of business that we\u2019ve got, but also the earnings and operating profit,\u201d he told Construction News <\/em>this\u00a0morning (11 March).<\/p>\n Revenue was slightly down to \u00a31.25bn from \u00a31.33bn \u2013 though the London Stock Exchange-listed firm doubled its shareholder dividend to 2.4 pence per share.<\/p>\n On the decision to increase the dividend, Vaughan said: \u201cThe business is in the best shape it\u2019s ever been.\u201d This was despite a number of \u201cnear-term macroeconomic conditions\u201d noted in the report.<\/p>\n \u201cWhile we remain mindful of the near-term macroeconomic and geopolitical conditions and their importance to government priorities and the timing of spending, we are well positioned for further cash generation and progress,\u201d the report said.<\/p>\n Cash at hand was slightly down to \u00a3158.5m from \u00a3164.4m.<\/p>\n Costain held no short- or long-term repayable bank loans or overdrafts.<\/p>\n Among the biggest jobs completed by Costain over the course of the year was Tideway, London\u2019s \u00a34.5bn \u2018super-sewer\u2019, which completed in March 2024.<\/p>\n Vaughan said the project was a \u201creal example of how you can deliver major infrastructure in the heart of London\u201d.<\/p>\n Vaughan also suggested Tideway could be a model for how private investment can drive infrastructure growth in the UK.<\/p>\n The Labour Party suggested before last year\u2019s general election that it would reintroduce public-private partnerships to boost infrastructure growth in the UK<\/a>.<\/p>\n Costain\u2019s Natural Resources segment \u2013 which includes projects in the water, energy, and defence and nuclear sectors \u2013 reported a slight increase in revenue from \u00a3388.9m to \u00a3405.3m.<\/p>\n Looking ahead, Costain expects \u201csignificant long-term growth\u201d in the energy sector in particular, given the push to tackle climate change in the UK.<\/p>\n In December, Costain and Balfour Beatty<\/a> got the go-ahead to start work on a \u00a34bn carbon capture<\/a> project in the North East. They expect to start work there later this year.<\/p>\n Vaughan also expects Costain to take on more work in the defence sector, after prime minister Keir Starmer pledged to increase defence spending to 2.5 per cent of GDP by April 2027.<\/p>\n \u201cInfrastructure is a really key part of that, to be able to support the navy, the army and the air force, and we\u2019ve got a good market position in that space,\u201d Vaughan said. \u201cSo we see that investment continuing to be strong.\u201d<\/p>\n But revenue was down in Costain\u2019s transportation division, after some projects in the road sector were delayed. Vaughan declined to name the delayed projects.<\/p>\n Revenue in the rail segment was also down by 9.1 per cent, which Vaughan said was largely due to the contractor completing its \u00a3150m job to revamp Gatwick Airport\u2019s rail station<\/a>.<\/p>\n