Overall, group revenue fell 6% to £1.33bn due to the rephasing and rescoping of projects at the transportation division covering highways and railway work.

This saw group operating profit fall 23% to £27m, while reported pretax profit slipped by 6% to £31m.

Over the year to the end of 2023, Costain incurred £8m of transformation and restructuring costs. It said that a further £5m of transformation costs were expected this year to complete the process.

At the transportation division, Alex Vaughan, chief executive officer, said a growth in rail had been offset by lower volumes of work at both highways and integrated transport projects, down 20% to £400m and 35% to £43m respectively.

The smaller Natural Resources division enjoyed modest growth with revenue up 4% overall to nearly £390m and operating profit just ahead of transportation’s performance at £22m.

Looking ahead, the year-end order book was down at £2.1bn (2022: £2.8bn) reflecting timing of certain bids for a major customer’s five-year investment plans.

Vaughan said: “We have an excellent pipeline of opportunities and are driving high levels of tendering activity.

“Contract margins are in our target range and at the right risk level. We expect significant growth in Water and Energy over the next few years.”

He added: “Good progress has been made in rebalancing our customer base with a broader range of exclusively Tier 1 clients.

“This puts us in a positive position to take advantage of the medium and long-term growth opportunities in UK infrastructure.

“The quality and balance of our forward work across our two divisions gives us good visibility on future revenue and margin. We have more than 80% of expected revenue secured for 2024 and our forward work stands at around three times 2023 revenue.”

The average month-end net cash balance during the year improved to £141m (FY 22: £102m).