The contractor delivered pre-tax profit last year slightly ahead of expectations, up 18% to £36.5m and said it was starting to reap rewards from rising spending in its key energy, water, defence and transportation markets.

Revenue in the year-end to December 2024 dipped 6% to £1.25bn, largely, due to slower activity in highways and rail.

But demand from other key infrastructure markets continued to bring forward work opportunity swelling the order and preferred bidder book by £1.5bn to £5.4bn.

The order book alone stood at £2.5bn at period end (FY 23: £2.1bn).

Alex Vaughan, chief executive officer, said “The record growth in forward work position is expected to deliver further progress in 2025 and 2026, followed by a step change in 2027 performance.

“The quality, balance and better risk profile of our forward work position of £5.4bn across our two divisions, together with continued investment in our chosen markets, gives us increasing visibility on future revenue and margin.”

He said Costain had largely completed its internal transformation programme, which helped to deliver a 4.4% adjusted operating margin in the last half of last year.

“We remain on track to deliver an adjusted operating margin run-rate of 4.5% during the course of 2025, in line with our ambition to deliver margins in excess of 5.0%,” he said.

“We continue to deliver improvements and invest in the business, and are increasingly confident in the group’s growth prospects, with our strong cash position and cash generation enabling the Group to enhance returns to shareholders,” added Vaughan

Costain said it would double full-year dividend on the strength of the improved performance and outlook.