The infrastructure specialist said trading since the start of January remained in line with board expectations, with revenue and adjusted operating profit both expected to rise this year.

In an AGM trading update, Costain said work volumes would build through the second half of 2026 as major customers accelerate investment programmes across water, transport, energy and defence-linked infrastructure.

The group added that 2026 revenue and profit would be weighted towards the second half as new contracts mobilise and activity levels rise.

Chief executive Alex Vaughan is driving Costain towards a “step change” in financial performance from 2027, underpinned by a broader customer base and a more balanced order pipeline.

Costain said it remains highly cash generative and still expects to end 2026 with net cash of around £175m.

That forecast comes after allowing for the partial unwind of historic working capital benefits, a £20m share buyback programme and an almost doubling of dividend cash payments.

The contractor has so far bought back 2.1m shares for £4m under the programme.

The group said momentum in its chosen markets was being supported by rising infrastructure spending.

Costain said its push to diversify away from central government work was also paying off.

At the end of 2025, its £7bn forward work position was split 51% with private and regulated customers, up from 30% two years earlier.

Central government accounted for 31%, down from 64%, while devolved government work rose to 17% from 6%.

The group said its forward work position remains broadly in line with the £7bn year-end total after allowing for revenue delivered so far this year.