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The Markets
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The Markets
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Builders and building materials

Can Costain convert contract wins into surging profits?

Construction and engineering group Costain Group PLC (LSE:COST) will reveal whether the change in government has been fruitful for the business when it reports its interims next week.

So far, the switch to a Labour government, and the subsequent changes to civil projects, have resulted in Costain winning a horde of new work, likely boosting its revenue outlook.

On Thursday, Costain won a £6.6 million contract with Thames Water to upgrade treatment sites in Hertfordshire, building on earlier deals to upgrade facilities in Sandhurst, Berkshire and Selborne.

A few days prior, the London-listed firm landed a multi-million-pound contract with BP in Teeside, focused on the development of a hydrogen pipeline network.

Another two contracts were won in August, dealing with support for a defence project and the production of a new dual carriageway in Cornwall.

This uptick in work has resulted in Costain shares surging by more than 35% in 2024, having jumped by over 15% since mid-June, when the Conservatives were still in power.

Whether the spike in revenues will lead to surging profits will be a key question for shareholders, who will be given some insight next Wednesday at its interims.

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