Costain Group Reports Steady H2 Performance Amid Infrastructure Investment Momentum

Costain Group delivered a second-half revenue of £576 million, representing a 3.2% year-on-year increase, driven by higher activity in energy transition and defense infrastructure contracts. Adjusted EBITDA reached £74.1 million, up 5.8% from the prior year, with an adjusted EBITDA margin of 12.9%, improving from 12.3% in H2 2024. The company attributed the margin improvement to operational efficiency gains and better project cost control. The performance was supported by a £210 million contract win in the defence sector for upgrading military facilities, alongside a £45 million energy project in Scotland focused on renewable grid integration. These contracts contribute to a growing backlog of £1.4 billion, up 6.3% from the end of H1 2025. Costain emphasized that its long-term strategy remains aligned with UK government targets for net-zero infrastructure and national security resilience. Despite the positive results, the company maintained a cautious outlook, citing inflationary pressures on materials and labor, as well as potential delays in public procurement timelines. The board reiterated its commitment to capital discipline, with a net debt-to-EBITDA ratio of 1.9x, within its target range. Shareholders received a final dividend of 1.3p per share, unchanged from the prior year. Market reaction was measured, with the company's shares rising 1.4% during morning trading. The broader UK infrastructure sector showed slight positive momentum, though no major shifts were observed in energy or defense indices. The results did not significantly influence broader market indicators such as CL=F or ^VIX.