As Costain reports its half year results, Helal Miah, investment research analyst at The Share Centre, explains what they mean for investors…
Costain, the engineering and infrastructure projects group, has this morning reported an encouraging set of half year results. These included a rise in revenues to £621.1m and operating profits of £13.1m – both up by 17%.
These improved figures were supported by a good number of long term contracts awards, including the development of the M4 corridor around Newport and the underground link between Crossrail and the Bakerloo Line at Paddington Station.
Keen investors should note that these contracts reflect strong growth within UK infrastructure projects and major customers continue to invest in upgrading and renewing the UK’s transportation networks. The group’s order book has jumped by 16% to a new record level of £3.7bn.
Management remains confident for the remainder of the year, saying that full year numbers will be at the upper end of the board’s expectations. This confidence is reflected in the 15% hike of the interim dividend to 3.75p. The market has welcomed these figures and the shares are up nearly 4% this morning. With features such as these in mind, we continue with our ‘buy’ recommendation for investors looking for a balanced return willing to accept a medium level of risk.
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