Costain reports a jump in profits as it targets big ticket contracts

COSTAIN, the engineering and construction firm, reported a 23 per cent jump in its first-half pre-tax profit as its environment division offset the decline in other units, and said it had raised its interim dividend.

Pre-tax profits for the year to June rose to £10.1m from £8.2m last year, while operating profit at its environment division rose more than five times.

Costain said its order book stood down eight per cent at £2.3bn due to its withdrawal from lower margin activity.

“We are targeting major clients who have to spend money despite economic uncertainty,” said Andrew Wylie, Costain’s chief executive.

In May, the group won a waste water treatment contract for upgrade work as part of a joint venture with Galliford Try and Atkins.

The London-listed company, which on Monday announced the acquisition of support services firm Promanex, said its plans to double profit over the medium term.

Costain’s shares, which have dropped in value since Mouchel rejected its takeover offer in March, rose four per cent to 8.5p yesterday after the group said it raised its dividend by eight per cent to 3.25p.