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Construction group Costain has unveiled a £10 million share buy-back as it saw half-year profits leap higher and cheered a boost from water contracts.
The group reported a 22% rise in underlying pre-tax profits to £19.4 million for the six months to June 30.
Reported pre-tax profits doubled to £17 million.
It saw revenues fall 3.8% to £639.3 million, largely due to a drop in its road division as some major contracts came to an end.
The group said it was in line for a fillip from demand for infrastructure work in Britain’s water sector, which is under pressure to invest to improve services and cut leaks.
Its order book stood at £1.8 billion at the end of June, up from £2.1 billion at the end of 2023, while forward work rose to £4.3 billion.
As a result of our confidence in our long-term prospects, and our strong cash position, we have today announced a £10 million share buyback which will commence with immediate effect
Alex Vaughan, chief executive
Costain added it had secured another £500 million of new work from Southern Water since the half-year, with “further wins expected in the second half”.
Costain said: “In line with Ofwat’s draft determination, we expect water investment to at least double during the next regulatory period to its highest level for decades and through recent contract awards we are well placed to capitalise on these opportunities.”
It is also benefiting from growth in the energy sector and the shift towards sustainable sources.
Shares lifted 3% in morning trading on Wednesday after the results and as Costain revealed returns for shareholders, although it held its dividend at 0.4p a share for the first half.
Read More SponsoredAlex Vaughan, chief executive of Costain, said: “We are performing strongly and are progressing with our strategic priorities in our chosen growth markets, including broadening our customer and service mix.
“As a result of our confidence in our long-term prospects, and our strong cash position, we have today announced a £10 million share buyback which will commence with immediate effect.”
