Milestone

Costain keeps forward work at record £7.0bn

By Staff Writer  |  14 August 2026

Costain held its forward work position at the record £7.0bn at half year 2026, with revenue up 3.4 per cent to £543.1m over the six months to 30 June and adjusted operating profit up 3.0 per cent to £17.3m.

The adjusted operating margin was unchanged at 3.2 per cent. Adjusted basic earnings per share rose 3.6 per cent to 5.7 pence. Net cash strengthened to £164.4m, an increase of £19.5m on the same point last year. The interim dividend was doubled.

The forward work figure is the one to read carefully. It is held at the record set at the 2025 full year rather than newly reached, and the company presents it as maintained. The distinction matters because a reported order book that is flat at a record is a different signal from one that has just set a record, and the two are easily conflated in reporting.

The company describes the half as an inflection point, with major projects moving from design into construction. That transition is the mechanism by which a flat forward work position converts into revenue, and it is the reason a contractor can report a static order book alongside guidance for accelerating activity.

Design to construction, and why it matters commercially

The movement from design into construction changes the commercial shape of a contract as much as its cash profile. Design stage work is typically lower value, lower risk and reimbursed on a basis close to cost. Construction brings the programme obligations, the site risk allocation, the interfaces with other contractors and the exposure to change that generate most of the claims practitioners see.

For anyone administering these contracts, the practical consequence is that the notice regimes start to matter in a way they did not during design. Early warning, change and delay notification provisions that were rarely engaged in a design phase become live from the first week on site, and the record keeping that supports a later entitlement has to be in place before it is needed rather than assembled afterwards.

Reading a forward work position

Forward work, order book and pipeline are not interchangeable terms, and contractors define them differently. Costain reports a forward work position covering a stated proportion of forecast revenue, which is a measure of visibility rather than of secured value alone. A framework place with no task orders let against it carries a different certainty from a signed construction contract with a start date, yet both may sit inside a single reported figure depending on the definition used.

The prudent reading, for a subcontractor or supplier pricing off a published order book, is to ask three questions. What proportion is contracted rather than framework or preferred bidder. What proportion is due to convert within the next twelve months. And what the contracting basis is, because a target cost or cost reimbursable book behaves differently from a fixed price one when inflation or programme moves against the contractor.

The market behind the figures

The company attributes first half growth to its natural resources work, which covers water and energy. Both sectors are running regulated investment programmes with fixed periodic settlements, which gives contractors in them a degree of visibility that the wider building market does not have, and which is why order books in this part of the sector have held up while others have not.

That visibility is not the same as certainty of timing. Regulated programmes are delivered through frameworks under which the client releases work in tranches, and the pace of release is a client decision. A contractor reporting a stable order book and rising revenue is reporting that the release is happening, which is the more useful signal of the two.

Revenue for the half rose from £525.4m to £543.1m. Adjusted profit before tax was £19.2m against £18.2m.