Costain Group PLC (LSE:COST) launched a £10 million on-market share buyback but kept its dividend flat as the infrastructure construction group hailed the recovery of its balance sheet and confidence in long-term prospects.
Revenue of £639.3 million was reported for the first half of 2024, down 4% from a year earlier due to a reduction from its transportation business, slightly offset by growth in its natural resources wing that serves the water, waste, hydrocarbons, chemicals and nuclear sectors.
Adjusted operating profits rose 8.7% to £16.3 million as margins improved in transportation and natural resources and reported profits before tax doubled to £17 million.
Forward work stood at £4.3 billion at the half-year stage, up from £4.0 billion a year earlier and more than three times revenue last year, which Costain was made up of "high quality" contracts across all sectors.
The water sector has been a source of recent contract wins, with more than £500 million of water contracts won post the half year.
Same as a year ago, an interim dividend payment of 0.4p was declared, while chief executive Alex Vaughan said the buyback was "a result of our confidence in our long-term prospects" and a cash balance that grew to £166 million".
He added: "We are performing strongly and are progressing with our strategic priorities in our chosen growth markets, including broadening our customer and service mix."
Adjusted operating margin targets of 3.5% and 4.5% remain "on track" to be met for the full year and 2025, he added, with further significant water contracts expected in the second half of the year.