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Costain has announced a 拢10m on-market share buyback programme after reporting increased pre-tax profit on slightly reduced revenue in the first half of the year.

Alex Vaughan, chief executive of the contractor, said the move was 鈥渁 result of our confidence in our long-term prospects鈥�.

The buyback will commence immediately and be carried out in two tranches of roughly equal value, with the full process anticipated to end no later than 28 March 2025, subject to market conditions.

It comes as the firm released its results for the six months ended 30 June 2024, which showed profit before tax had increased 100% from  拢8.5m to 拢17m.

Costain also recorded reduced revenue of 拢639m, compared with 拢664m in the first half of 2023, which it attributed to a reduction in income from transportation, which follows cuts to HS2.

Vaughan said: 鈥淲e are performing strongly and are progressing with our strategic priorities in our chosen growth markets, including broadening our customer and service mix. 

鈥淚n the first half we have delivered a further significant increase in operating profit together with a sharp growth in earnings per share. 

Costain鈥檚 forward work position, a combination of its order book and preferred bidder book, stood at 拢4.3bn at the end of the period, compared with 拢4bn at the end of the same period the year prior.

>> Read more: Costain to move to new City home this summer as profit and income slip 

Vaughan said the business had won further significant water contracts after the end of the reported period and expected further contract wins in the second half.

According to the report, Costain 鈥渞emain[s] on track to deliver an adjusted operating margin run-rate of 3.5% during the course of FY 24 and 4.5% during the course of FY 25, in line with our ambition to deliver margins in excess of 5.0%.鈥�

Commenting on the half year results, Adrian Lunn, director at Eddisons said the firm had 鈥渄elivered a solid first half performance, despite a complicated backdrop鈥� 

鈥淒espite a dip in revenue, following cuts to projects such as HS2, the company鈥檚 recent wins, including the 拢6.6 million Thames Water contract and the multi-million-pound BP contract in Teesside, signal a positive shift in its outlook,鈥� he said.

鈥淏ig infrastructure projects will be popular under our new government. Labour is set on delivering growth levelling up the country and that鈥檚 ultimately good news for operators like Costain.鈥�