Costain Group PLC (LSE:COST) shares leapt 9% to a new five-year high of 140p after the infrastructure construction firm launched a £10 million share buyback alongside a trading update.
In short, trading is in line with expectations, the company said, with a "strong, high-quality forward work position that is more than four times annual revenue".
CEO Alex Vaughan hailed the strategy over the past three years to improve the quality and size of contracts, strengthening net cash and refinancing bank and bonding facilities.
"Accordingly, with our defined benefits pension scheme in surplus for the second consecutive year, we are pleased to announce a further share buyback programme that is consistent with the group's capital allocation framework."
Contract wins in the year to date include in the nuclear energy sector with Urenco and Sizewell C, and further work with Anglian Water to deliver an additional 260 kilometres of major strategic pipeline in the East of England over the next five years to improve resilience to drought and climate change.
Following the doubling of the final dividend for last year, directors intend for the first-half dividend of 2025 to represent around 33% of the full-year dividend, to provide headroom for further dividend growth as and when the current 'dividend parity' arrangement is no longer in place.
Analysts at Panmure Liberum said they were increasing their 2025 and 2026 forecasts for earnings per share by 1% and 2% respectively.
"Given increasing confidence in the business, we increase our target price from 150p to 170p," they said.
Back in 2018, following the collapse of rival Carillion, and into 2019, Costain shares fell from 450p to 170p, dropping to below 30p in early 2020 after being hit by project delays.