Costain (LSE:COST) said trading during 2026 has continued in line with expectations, with both revenue and adjusted operating profit anticipated to increase over the year. The company expects adjusted operating margins of around 4%, with performance weighted more heavily toward the second half as recently awarded contracts move into mobilisation and delivery phases.
The infrastructure and engineering group also highlighted its strong cash generation profile, forecasting a year-end net cash position of approximately £175 million. Costain additionally retains access to an undrawn £100 million revolving credit facility, which has now been extended through to 2030.
Shareholder returns remain a priority for the company, with management continuing a £20 million share buyback programme alongside increased dividend distributions.
Costain said momentum across its target markets remains positive, supported by rising infrastructure investment commitments including United Utilities’ enlarged AMP8 spending programme and the UK government’s £27 billion roads investment initiative.
The group’s £7 billion forward work position has also become increasingly diversified, with more than half of future revenue now linked to private sector and regulated customers. Recent framework agreements and project wins across airports, water, energy and road infrastructure have further strengthened the company’s pipeline and are expected to support what management described as a significant step-up in performance from 2027 onward.
The company’s broader outlook is supported by improving financial stability, stronger earnings quality, expanding margins, low leverage levels and healthy cash conversion. Technical indicators also remain favourable, reflecting a positive share price trend.
However, management acknowledged that a multi-year decline in revenue remains a risk factor that could constrain future growth if the trend continues over the longer term.
More about Costain Group
Costain Group is a UK-based infrastructure and engineering group delivering complex projects across transport, water, energy and defence markets. The company provides consultancy, design and construction services focused on improving connectivity, sustainability and resilience within the UK’s infrastructure network while supporting long-term decarbonisation goals.
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