Skip to main content
The Markets by Proactive
Go to Proactive UK

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.