Costain has launched a �10m share buyback programme after its defined benefit pension scheme was in surplus for the second year running.
The UKs 16th biggest contractor said on Monday (16 June) that the programme was an appropriate and value-enhancing use of cash. It added that it would still be able to maintain the group's financial flexibility to continue to invest in its strategy to deliver sustainable growth and attractive returns.
Costain instructed Investec Bank and Panmure Liberum to lead the share buyback. It follows a similar �10m programme in 2024.
The contractor also revealed in a trading update for the six months to 30 June 2025 that its trading remained in line with expectations for the year to 31 December 2025. It said its strong, high-quality forward-work position was worth more than four times its annual revenue.
Last year, Costain tabled a revenue of �1.25bn and chief executive Alex Vaughan said the London Stock Exchange-listed contractor was in the best shape its ever been.
In announcing his firms trading update, he said: Over the past three years we have executed on our strategic plans, improved the quality and size of the groups contract portfolio, delivered on our margin targets, significantly strengthened our net cash position and successfully refinanced our bank and bonding facilities, giving the group the financial strength and capability to support its future growth opportunities.
He said the share buyback programme was consistent with the group's capital allocation framework.
Costain has scooped a number of significant contracts over the past six months, including a major project to deliver 260km of pipeline for Anglian Water, as part of the Strategic Pipeline Alliance. Farrans, Jacobs and Mott MacDonald Bentley are also in the alliance.
It also signed several new contracts in nuclear energy with Sizewell C and Urenco.
In March, Costain said it expected to see significant long-term growth in the energy sector in particular, given the UK push to tackle climate change.
Costains pre-tax profit soared by almost 20 per cent last year, from �30.9m to �36.5m, while Vaughan also pointed to record growth in its year-end order book.
