In a City trading statement this morning the firm said strong working capital management had seen net cash built up to levels significantly ahead of market expectations while profits were expected to be in line with forecasts.

Alex Vaughan, CEO, Costain said: “We have had a positive trading year and expect to deliver adjusted operating profit in line with market expectations.

“Our cash performance has been very strong, driven by continued improved operational performance, an increase in financial income compared to 2022, and ongoing positive working capital timings.”

He added: “We are looking forward to supporting Northumbrian Water in this new working relationship, upgrading both its wastewater and water treatment infrastructure.

“This contract win not only reflects our continued growth in the water sector, but it also reinforces our commitment to improving critical infrastructure in the North-East of England. This includes major upgrades to the region’s highways and our carbon capture work in Teesside as part of the East Coast Cluster, generating opportunities for regional suppliers and employment for local people.”

Northumbrian Water Group has appointed Costain as one of its partners to create and deliver its strategic infrastructure upgrade programme.

The Northumbrian Water AMP8 framework will see contracts awarded with a potential value of up to £670m to Costain during a 12-year period and builds on recent significant wins in the water sector.

The contract starts immediately and will run for a seven-year initial term with an option for a five-year extension.

AMP8 will see the biggest investment in the water industry for decades.

In 2023, Costain extended into AMP8 its Managed Service Provider contract with United Utilities and its consultancy work with Yorkshire Water. Costain has also won funding from Ofwat to support innovation projects.