Costain H1 profit up, hikes dividend by 15%

Construction and engineering group Costain reported a rise in first-half pre-tax profit as revenue grew and the order book remained at a record level.

In the six months to the end of June, reported pre-tax profit increased to £11.3m from £10m the year before on revenue of £791.4m, up from £621.1m.

Underlying operating profit was up 21% to £15.8m and the order book edged up 5% to £3.9bn, remaining at a record level.

Costain said growth in operating profit reflects further strong growth in the infrastructure division as customers continue to invest in upgrading and renewing the UK’s transport networks, and progress in the natural resources division.

The company hiked its interim dividend by 15% from the first half of 2015 to 4.3p per share.

Chief executive Andrew Wyllie said: "These are exciting times as billions of pounds are being spent upgrading and renewing the country's energy, water and transportation infrastructure.

"There is a revolution in the deployment of technology-led innovative solutions to meet the increasingly complex requirements of our national infrastructure needs, and we are continuing to rapidly transform the Costain business to be at the heart of the opportunity this presents. Costain remains on course to deliver a result for the year in line with the Board's expectations."

Costain said it has seen no impact to date form the UK’s decision to leave the European Union, adding that it was still too early to predict longer-term outcomes.

“We believe that, as a consequence of our strategic focus on the major customers who are continuing to spend billions of pounds addressing critical UK infrastructure needs, we have a resilient business and can see as much significant potential opportunity as any downside in the new environment.”

Following a strong start to the year, the group said it is on track to deliver full-year results in line with the board's expectations.

At 1030 BST, Costain shares were up 5.4% to 368p.