In a trading update for the year to 31 December 2018, the company said it had an order book of £4.2bn for the period, up from £3.9bn in 2017.
Costain was the preferred bidder on £600mln worth of work in 2018, compared to £400mln a year ago.
The company’s cash position stood at £110mln at the end of the year, down from £177.7mln in 2017 due to the timing of receipts.
"This has been another year of progress for Costain,” said chief executive Andrew Wyllie.
“The benefits of our integrated offering, long-term strategic relationships with our clients and strong balance sheet position us well for the future and the significant opportunity we see across our rapidly-changing end markets."
Liberum reiterated a ‘buy’ rating and target price of 545p on the stock, saying a strong pipeline in road, rail and utilities should drive further order book growth.
The broker added that there has been some promising contract wins in the connected autonomous vehicles market.
It expects no impact from delays on the Crossrail, which Costain is helping to construct with joint venture partners.
“Margins are increasing in line with guidance given at the first half, with full-year margins of 4-5% at Infrastructure and progress at Natural Resources,” Liberum said.
Liberum continues to expect underlying fully diluted earnings per share of 38.2p and a dividend per share of 15.3p for the full year.
In mid-morning trading, Costain shares were 6.5% higher at 345.50p.
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