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(Sharecast News) - Construction and engineering firm Costain said on Thursday that trading has been in line with its expectations as it reiterated that full-year revenue and adjusted operating profit would be weighted to the second half.
In an update for the period from 1 January to date, the company said it continues to expect revenue growth and further growth in adjusted operating profit in 2026, alongside an "industry-leading" adjusted operating margin of around 4%.
"The group is making good progress towards the expected step change in financial performance in FY 27 and beyond," it said.
"Contract mobilisations and increased activity levels, reflecting an acceleration in customers' investment spending plans, are expected to build during the second half of FY 26. As a result, and as previously indicated, FY26 revenue and adjusted operating profit is expected to be second half weighted."
Costain said it remains highly cash generative with a strong balance sheet. It continues to expect a full-year net cash position of around 175m, after the partial unwind of historic working capital benefits, the ongoing 20m share buyback programme and an almost doubling of dividend cash payments.
The company said its chosen markets continue to demonstrate "highly attractive growth opportunities". Among recent positive developments, it pointed to the fact that significant and long-standing customer United Utilities has announced it will increase its AMP8 capital investment programme by around 30% to 11.5bn.
It also noted the Department for Transport's announcement of its Road Investment Strategy 3 - the largest single investment in the strategic road network in recent times - that provides 27bn of investment over the five years to 2031.
Costain said it has continued to win a range of work across its chosen markets and, after allowing for the revenue delivered in the period, retains a forward work position that is broadly consistent with the 7bn FY 25 year-end position.
"The pipeline of bidding opportunities remains strong across all sectors," it said.
At 1055 BST, the shares were up 3.1% at 202.63p.
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