Creating a sustainable future
Annual Report and Accounts 2025Annual Report and Accounts 2025
Creating a sustainable future
Costain Group PLC | Annual Report and Accounts 2025
Overview
Highlights 1
Chair’s Statement 2
Strategic Report
Chief Executive Officer’s Statement 4
Our Vision, Purpose and Strategy 8
Market Overview 10
Operational Review 12
Key Performance Indicators 16
s172 Statement 18
Our Sustainability Performance 22
The Task Force on Climate-related
Financial Disclosures (TCFD) 24
Chief Financial Officer’s Review 32
Risk Management 34
Viability Statement 40
Non-financial and sustainability
information statement 41
Governance
Board of Directors 42
Executive Board 44
Governance at a glance 46
Our Governance Structure 47
Chair’s Introduction 50
Attendance and Composition 51
Board Performance 52
Workforce Engagement 53
Audit and Risk Committee Report 54
Nomination Committee Report 58
Board Diversity 60
Directors’ Remuneration Report 62
Directors’ Report 89
Directors’ Responsibility Statement 95
Independent Auditor’s Report 96
Financial Statements
Consolidated Income Statement 105
Consolidated Statement
of Comprehensive Income 106
Consolidated Statement
of Financial Position 107
Company Statement
of Financial Position 108
Consolidated Statement
of Changes in Equity 109
Company Statement
of Changes in Equity 110
Consolidated Cash Flow Statement 111
Notes to the Financial Statements 112
Five-Year Financial Summary 154
Other Information
Financial Calendar and Other
Shareholder Information 155
For the latest investor relations information visit our website /
www.costain.com/investors
Together we shape,
create and deliver
solutions that transform
the performance of the
infrastructure ecosystem.
Safety
3
0.16 LTIR
Operating profit
£44.8m
Carbon emissions (Scope 1,2 and 3)
175,078tCO
2
e
Social contribution
4
£290k
Operating profit margin
4.3%
Basic earnings per share
13.9p
Adjusted free cash flow
1
£63.1m
Adjusted basic
earnings per share
2
14.5p
2023 294,840tCO
2
e
2024 297,123tCO
2
e
2025 175,078tCO
2
e
Revenue
£1,045.7m
2023 £1,332.0m
2024 £1,251.1m
2025 £1,045.7m
2023 £26.8m
2024 £31.1m
2025 £44.8m
2023 2.0%
2024 2.5%
2025 4.3%
2023 8.1p
2024 11.3p
2025 13.9p
2023 £72.0m
2024 £27.1m
2025 £63.1m
Adjusted operating profit
2
£47.1m
2023 £40.1m
2024 £43.1m
2025 £47.1m
Adjusted operating
profit margin
2
4.5%
2024 3.4%
2025 4.5%
2023 3.0% 2023 12.2p
2024 14.6p
2025 14.5p
2023 0.12 LTIR
2024 0.11 LTIR
2025 0.16 LTIR
2023 £460k
2024 £410k
2025 £290k
Financial highlights Non-financial highlights
1 Adjusted free cash flow is defined as cash from operations, excluding cash flows relating to adjusting
items and pension deficit contributions, less taxation and capital expenditure.
2 See notes 2 to 4 of the financial statements for adjusted metric details and definitions, and reconciliation
to reported metrics.
3 Lost time injury rate is calculated by dividing the number of lost time Injuries by the number of hours
worked, multiplied by 100,000.
4 Social contribution is defined as the sum of charitable/community donations, employee fundraising,
and the social value resulting from employee volunteering.
See our Key Performance Indicators for more information on the above / pages 16 and 17
See our Sustainability Performance for more
information / page 22
Our sustainability
performance
Operating responsibly is
integral to the creation of a
more prosperous, resilient
and decarbonised future,
underpinning how we operate
and our expectations of our
people, suppliers and partners.
For more information, download
our Sustainability Report here
www.costain.com/sustainability
01Financial StatementsGovernanceStrategic ReportOverview
Costain Group PLC | Annual Report and Accounts 2025
Chair’s Statement
This Chair's Statement provides an opportunity for reflection on
the last three years at Costain, during which time I have been
Chair. I am extremely proud of the significant progress made
by the business during this period, as evidenced by our strong
financial performance and the strategic choices and operational
improvements that have created a resilient and high-quality
business. This is the result of the enthusiasm, dedication and
expertise of our people, and I remain extremely impressed by the
quality of our teams that I engaged with at the sites I visited during
FY 25. On behalf of the Board, I would like to hugely thank every
one of our colleagues at Costain for their commitment and hard
work every single day. Costain is in great shape as we build and
focus on our next stage: strategic, customer-focused growth.
Improving the quality of our business
Our key financial metric for the past three years has been adjusted
operating margin, which we selected as the best indicator of the
quality of our contract portfolio and earnings. Our underlying
margin is industry leading. In FY 24 we exceeded the 3.5% target
margin run-rate to be achieved during the year, and in FY 25 we
have again exceeded the 4.5% target margin run-rate. The strong
margin performance over the past three years reflects the rigorous
risk management processes and disciplines that have been firmly
embedded into the business, the operational improvements
brought about by our three-year transformation programme, and
our mix of contracting and consultancy work. Our contract portfolio
contains no single-stage lump sum contracts and is predominantly
long-term frameworks of target cost contracts where the scope
of work, programme design and budget are developed and
agreed with the customer. We have a thorough approach to
project selection to ensure terms and conditions and margins are
appropriate for each project and retain an unwavering focus on
maintaining a disciplined approach to contract risk management as
the project progresses.
We have improved the resilience of the business by broadening
the scale of our market presence across all sectors. In FY 25, we
won new customers such as Urenco and expanded our work on
existing frameworks with customers from the regulated sector,
private sector, and local and devolved government sectors, such
as Heathrow, TfL, EDF, Anglian Water and Babcock. As a result,
we have greater resilience in the event of short-term changes in
individual customer spending plans.
As well as improving the quality and diversity of our contract
portfolio, we have been highly successful in increasing the volume
of work secured. Our forward work position grew by a further
£1.6bn in FY 25 to a record £7.0bn, almost seven times our FY 25
annual revenue, indicative of our customers' investment plans and
the increasingly attractive markets in which we have carefully
chosen to focus and work on.
Attractive markets with growing momentum
Our market focus remains on the critical national infrastructure
that meets essential needs (Transport, Water, Energy and
Defence) and our strategic focus remains on long-term
relationships with customers who seek to partner with Costain
for our significant support across the lifecycle of their assets.
Together, we expect this to result in the delivery of sustainable,
profitable growth over the medium term.
There is increasing momentum behind the need to create
a sustainable future for a more prosperous, resilient and
decarbonised UK. The publication of the UK Government’s
new 10-year Infrastructure Strategy in the summer of 2025,
backed by £725bn of funding over the next decade, was a
significant milestone, which positively impacted our marketplace.
It represents the first time the UK Government has set out a
long-term infrastructure strategy that brings both economic
Kate Rock
Chair
02
and social infrastructure together. The Infrastructure Strategy
was followed by the publication of the Infrastructure Pipeline,
which provides the project-by-project detail supporting the
Infrastructure Strategy. Together with the most recent regulatory
determinations in water, energy and aviation, all of which involve
significant increases in regulatory asset spending over the next
investment period (notably in water where investment in AMP8 is
set to be twice the level of AMP7), the Infrastructure Strategy and
Infrastructure Pipeline provide increased clarity and confidence in
the significant growth opportunities in our target markets.
Delivering predictable, profitable growth
Looking ahead, given the attractive market backdrop and our
record forward work position, the improved quality of our business
and our strong balance sheet, Costain is well placed to deliver
sustainable, profitable growth over the medium term. Key to this
is the maintenance of strong risk management disciplines and
enhancement of our operational effectiveness and efficiency
through continued investment in systems and expertise to enable
us to deliver predictable best-in-class outcomes to our customers.
The Board of Directors is also focused on ensuring the business
has the capacity and capability to deliver the large volume of work
won over recent years, while continuing to operate responsibly
and sustainably. This requires an engaged and thriving workforce
and, with this in mind, the Board established the role of Workforce
Engagement Director to support this focus, with Amanda Fisher
beginning in this role in early 2025. Workforce engagement is the
responsibility of the entire Board, and I was again delighted to be
able to visit several of our project sites during the year to see the
dedication and passion our teams bring to their projects and hear
what the business can do to continue to support them and ensure
they stay safe.
Safety is a core value at Costain, and we aim to eliminate harm
across our business. Our focus on safety has seen us reduce
injuries to industry-leading levels in recent years, culminating in a
record performance in FY 24, although in FY 25 there was a rise in
our lost time injury rate safety metric.
A key achievement for the business in 2025 was the retention of
our Best Companies' accreditation as ‘A Very Good Company to
Work For’ following our latest engagement survey, in which 75%
of our workforce participated. We will take the employee feedback
from this survey and look to make further improvements to our
employee proposition to make Costain a great place to work.
Alongside our direct workforce, our ability to deliver on our future
growth potential also relies upon being a trusted and valued partner
for an enlarged supply chain. In FY 25, we continued to invest in
resource and capability to ensure we secure the necessary supply
chain expertise to deliver predictable outcomes to our clients.
Sustainability is embedded in what we do and how we do it.
Together with our customers and supply chain, we create
infrastructure for a more prosperous, resilient and decarbonised
future. We aim to do this in a way that creates value for all of our
stakeholders. Recognising this, the Board established a Sustainability
Committee in FY 25, chaired by Steve Mogford, to ensure that our
sustainability programme and actions receive the time and attention
they deserve, and help the business to capitalise on the strong
market environment and work proactively with our customers to
create a sustainable future for the UK.
The previously mentioned governance measures relating to
workforce engagement and sustainability will further enhance
the ability of the Board to provide the oversight and guidance
necessary for Costain to deliver on its growth ambitions and
generate long-term value for shareholders.
Shareholder returns
As announced on 26 January 2026, as part of the latest triennial
review of the Group’s defined benefit pension scheme, we reached
an agreement with the Trustee on the removal of the dividend
parity arrangement that had previously been a key feature of the
scheme agreement. This has removed a significant constraint that
existed with respect to returns to shareholders, as these returns will
no longer trigger matching contributions to the pension scheme.
The Board carefully considered its options and decided that
it could now move to its target dividend cover of three times
adjusted earnings per share. As a result, the Board has proposed
a final dividend per share of 3.2 pence, resulting in a FY 25 full-
year dividend per share of 4.2 pence, an increase of 75% on the
FY 24 full-year dividend per share. In addition, the Board decided
that it would return a further £20m to shareholders in FY 26 via an
on-market share buyback programme, details of which we plan to
announce on 10 March 2026. This follows the £10m share buyback
programmes completed in each of FY 24 and FY 25.
Having made these returns to shareholders, the Board is confident
that the business will retain a strong balance sheet. Net cash is
expected to be approximately £175m at the end of FY 26 after the
partial unwind of historic working capital benefits and enhanced
shareholder returns, in the form of the above-mentioned £20m
share buyback programme and an almost doubling of dividend cash
payments.
This combination of a strong net cash position, progression to our
dividend cover target of three times adjusted earnings per share,
and expanded share buyback programme is creating substantial
value for shareholders. Going forward, the Board will continue to
assess the Group's capital structure on a regular basis, factoring
in forecast free cash flow generation for the year ahead, with the
potential for additional future returns of capital as appropriate.
Summary
The Board thanks our teams, customers and suppliers for
their efforts and support during the year and their long-term
commitment to the Group. While we remain mindful of the near-term
macroeconomic and geopolitical conditions, we are well positioned
for further cash generation and earnings growth. Costain is in
great shape, with improved quality of earnings, business resilience,
and strong work-winning momentum in attractive growth markets
driving our confidence in the delivery of FY 26 expectations, with a
step change in performance expected in FY 27 and beyond.
Kate Rock
Chair
9 March 2026
Strategic ReportOverview Governance Financial Statements 03
Chief Executive Officer’s Statement
Strong financial performance reflecting quality of
contract portfolio and predictable execution
We report both statutory results (reported) and results excluding
adjusting items (adjusted).
Revenue was £1,045.7m in FY 25 (FY 24: £1,251.1m). In Natural
Resources, there was increased revenue across Energy, and
Defence and Nuclear Energy, with stable revenue in Water, a good
performance given the water industry was transitioning from the
delivery of AMP7 to early design work in the AMP8 regulatory cycle
and Tideway neared completion. In Transportation, there were
revenue reductions in Road, due to the expected completion of
historic Regional Delivery Partnerships (RDP) framework projects,
and in Rail, as previously announced, due to the development of a
revised schedule for HS2, which moved work into FY 26 and future
years. There was strong growth in Integrated Transport, reflecting
the expansion of our work at Heathrow.
Adjusted operating profit grew by 9.3% to £47.1m (FY 24: £43.1m),
with increased volumes and strong in-year contract performance
in Natural Resources and the positive impact of normal course of
business contract completions in both divisions partially offset by
lower volumes in Transportation. The adjusted operating margin
increased to 4.5% (FY 24: 3.4%), benefiting from the increase in
adjusted operating profits and the lower volumes of completed
historic RDP framework projects, which operated at below normal
margin levels. Reported operating profit increased to £44.8m (FY
24: £31.1m), with lower adjusting items of £2.3m (FY 24: £12.0m),
reflecting £2.6m of restructuring costs (FY 24: £0.1m credit), £0.7m
of residual Transformation programme costs (FY 24: £5.4m), and a
£1.0m provision release relating to fire safety compliance liabilities
(FY 24: £6.7m cost).
Net finance income was £3.8m (FY 24: £5.4m), reflecting lower
interest income from lower bank deposits and interest rates, and
higher bank charges on the accelerated amortisation of charges
relating to our prior refinancing. Adjusted profit before tax increased
4.1% to £50.5m (FY 24: £48.5m). Adjusted basic earnings per share
(EPS) was broadly flat at 14.5 pence (FY 24: 14.6 pence), with the
increase in adjusted operating profit and a reduced share count
following the FY 24 and FY 25 share buyback programmes offset by
a higher adjusted effective tax rate and lower net finance income.
Reported profit before tax was up 32.1% at £48.2m (FY 24: £36.5m),
while reported basic EPS was up 23.0% at 13.9 pence (FY 24: 11.3
pence).
Further strengthening of the balance sheet
Our net cash position at the end of the year was £189.3m (FY
24: £158.5m) after taking account of the £10m share buyback
programme and higher dividend payments in FY 25.
Cash from operations in FY 25 was £50.7m (FY 24: £41.7m), with the
increase reflecting increased adjusted operating profits and working
capital timing. Adjusted free cash flow in FY 25 of £63.1m (FY 24:
£27.1m) was higher than in the same period last year, benefiting from
the above-mentioned increase in cash from operations and lower
capital expenditure following the investment in a new HR system in
FY 24. During FY 25 we paid 97% of invoices within 60 days (FY 24:
98%).
We expect our FY 26 year-end net cash position to be
approximately £175m after the partial unwind of historic working
capital benefits and enhanced shareholder returns, in the form of a
£20m share buyback programme and an almost doubling of dividend
cash payments.
Alex Vaughan
Chief Executive Officer
04 Costain Group PLC | Annual Report and Accounts 2025
Revenue
£1, 045. 7m
2023 £1,332.0m
2024 £1,251.1m
2025 £1,045.7m
Adjusted operating profit
1
£47.1m
2023 £40.1m
2024 £43.1m
2025 £47.1m
Adjusted operating profit margin
1
4.5%
2024 3.4%
2025 4.5%
2023 3.0%
1 See notes 2 to 4 of the financial statements for adjusted metric details
and definitions, and reconciliation to reported metrics.
Record forward work position
Costain continues to secure further strategic programme awards
and enjoys good visibility on future work. As at the end of FY 25,
our forward work position, which is our combined order book
and preferred bidder book, stood at £7.0bn (FY 24: £5.4bn; H1 25:
£5.6bn), representing an increase of 30% and almost seven times
our FY 25 annual revenue. It includes £1.1bn of revenue for FY 26,
equivalent to 90% of our forecast revenue for the year.
This forward work position is built on long-term programmes that
enable us to deliver a high consistency, continuity and quality
of work for our customers. As at the end of FY 25, it included no
single-stage lump sum contracts and was predominantly long-
term programmes of work with target cost contracts where the
scope of work, design and budget are developed and agreed with
the client.
Our order book stood at £3.6bn at period end (FY 24: £2.5bn;
H1 25: £3.4bn). The preferred bidder book stood at £3.4bn at
period end (FY 24: £2.9bn; H1 25: £2.2bn). The preferred bidder
book comprises contracts for which we have been selected on
frameworks, and allocated an intended volume of work, but where
a further works order is required prior to the works commencing.
We note that some of our framework and consulting revenue is
not recorded in either our order book or preferred bidder book, as
it is undefined.
Rigorous and disciplined risk management
The stringent assessment and management of risk is central to the
successful execution of our strategic plans. Our risk management
processes and disciplines continue to ensure a robust operational
and trading performance, and our ambition remains to deliver
improving operating margins in excess of 5.0%. This is achieved
through rigorous risk management and commercial control
throughout our operations in three key areas:
• a disciplined approach to contract selection, which includes
robust commercial and legal reviews, proactive shaping of
procurement approaches with our customers, and a rigorous
multi-stage gating process;
• commercial and operational assurance, which includes project
level controls, management oversight of forecasts, and cross-
disciplinary contract review meetings; and
• working with strategic supply chain partners, with application of
robust supply chain management processes.
Capital allocation
The Group's capital allocation priorities remain consistent. As
announced on 26 January 2026, a new agreement has been
reached with the Trustee of the defined benefit pension scheme
that removes the dividend parity arrangement that previously
existed, taking away a significant constraint that had existed in
respect of returns to shareholders.
Recognising this, the Board undertook a review of its options
regarding both the dividend and other returns of capital, and on 26
January 2026 it announced two intentions: to pay a dividend in line
with its target of dividend cover of three times adjusted earnings,
and to undertake a £20m share buyback programme in FY 26. The
Board will proceed with both actions. Our capital allocation priorities
continue to be:
• Investing for growth. Costain will continue disciplined
investment in key areas such as systems and digitalisation to
accelerate its business transformation and expects to invest
around £10m per annum in this area in the coming years. We
will also continue to prioritise investment in capabilities and
expertise to support targeted growth opportunities.
• Dividend. The Group has a target dividend cover of three times
adjusted earnings. The Board has proposed an increase of 60%
in the final dividend for the year ended 31 December 2025 to 3.2
pence per share (FY 24: 2.0 pence). This results in an increase of
75% in the full-year FY 25 dividend to 4.2 pence per share (FY 24:
2.4 pence). If approved at the AGM, the final dividend will be paid
on 26 May 2026 to shareholders on the share register at close of
business on 17 April 2026.
• Selective M&A. The Board retains optionality to pursue strategic
investments in technology, skills and capabilities to enhance our
ability to support customers.
• Returning surplus capital. After ensuring a strong balance sheet,
identified surplus capital will be returned to shareholders through
share buybacks or special dividends. The Group completed a
£10m share buyback programme in both FY 24 and FY 25, and
on 10 March 2026 it plans to announce a £20m share buyback
programme, to be completed during FY 26.
05Strategic Report Governance Financial StatementsOverview
Chief Executive Officer’s Statement continued
Group strategy
Costain is an infrastructure solutions business, with a purpose of
improving people’s lives, and is implementing its growth and value
creation strategy through:
• a clear focus on markets where there is strategic long-term
investment being made to meet critical national needs, to
create a sustainable future for a more prosperous, resilient, and
decarbonised future;
• working with our targeted customers in long-term strategic
partnerships, normally for five years or more; and
• enhancing our value by providing services and innovative
engineering solutions to meet our customers' broad and
changing needs.
The Group made good progress during FY 25 in executing its
strategic priorities.
Growth in strong markets
We have increasing confidence that we are well positioned in our
chosen growth markets of Transport (Road, Rail and Integrated
Transport, including aviation and ports), Water, Energy, and
Defence, where there is strategic long-term investment being
made to meet critical national needs, as evidenced through:
• the UK Government’s 10-year Infrastructure Strategy and
Infrastructure Pipeline, providing greater clarity on £725bn of
investment;
• regulated determinations in water, energy and aviation that are
expected to result in significant increases in future investment in
these sectors; and
• the mix of our record forward work position of £7.0bn.
Predictable, best-in-class delivery
It is critical that the services and programmes that we deliver for
our customers are predictable and best-in-class as standard. We
continuously drive improvements in this area. In FY 25 we:
• opened the M1 National Emergency Area Retrofit North
programme ahead of schedule, and opened our projects on the
M6, A30 and A1 on time;
• had a very positive close to AMP7, with our teams achieving 100%
compliance with our customers’ regulatory date commitments
across over 100 projects;
• successfully completed the twin-bore Northolt Tunnel from West
Ruislip to Old Oak Common for HS2 safely and on schedule;
• safely managed the complex demolition of the Allerdene bridge on
the A1 Birtley to Coal House project with no disruption to the busy
East Coast Main Line;
• delivered extensive upgrades to dock infrastructure at Devonport
to the highest safety and environmental standards, to enable
Royal Navy submarines to undergo critical maintenance;
• safely completed the demolition of the connector between
Terminal 1 and Terminal 2 (T2) at Heathrow ahead of schedule, a
key milestone in the T2 baggage handling facility project; and
• unlocked significant efficiency through our solutions on our
programmes.
Growing, resilient customer mix
We choose to work with customers in strategic long-term
programmes, which are normally of a duration of five years or
more. We build long-term, valued partnerships, with many of our
customer relationships extending over 20 years as we repeatedly
extend programmes of work. These include National Highways,
Sellafield, Southern Water, Thames Water, and United Utilities.
New customer relationships added over the past five years include
Heathrow, Manchester Airports Group, Babcock, TfL, Anglian
Water, bp and Northumbrian Water Group.
During FY 25, we continued to build and expand our customer
base and increase the breadth of activities with new and existing
customers to enhance the business’ resilience in the event of
short-term changes in individual customer investment plans.
Customer relationships extended during FY 25 include:
• Sellafield: 15-year contract to deliver critical utilities
infrastructure upgrades at the nuclear power station, extending
and expanding a relationship that began in 2005;
• Anglian Water: contract to deliver an additional 260km of
pipeline in the east of England over the next five years, as part
of the Strategic Pipeline Alliance;
• EDF: a five-year extension to our existing contract to provide
project controls services across their fleet of eight nuclear
power stations; and
• Babcock, Heathrow, Severn Trent Water, Thames Water and TfL:
expansion of our work on existing framework agreements to
progress refurbishment of their critical infrastructure.
Post year-end we were awarded a contract for the design and
build of a junction on the M5 in Somerset, extending our long-
standing relationship with National Highways.
New customer relationships in 2025 include:
• Urenco: a programme delivery partner framework to deliver
new and upgraded infrastructure at its Cheshire site, and an
additional design services FEED for Europe’s first commercial
scale high-assay low-enriched uranium facility;
• Eastern Highways Alliance (EHA): a place on the multi local
authority framework that covers civil engineering and
construction works across the EHA road network;
• Nuclear Restoration Services (NRS): a contract to deliver a
decommissioning project at the Trawsfynydd nuclear power
station in North Wales; and
• Sizewell C: a 10-year contract to provide project management
expertise.
Post year-end we were awarded a place on two framework
contracts with London Gatwick airport, covering a range of capital
projects to upgrade the airport’s infrastructure.
06 Costain Group PLC | Annual Report and Accounts 2025
Building a meaningful consultancy service
Our business is differentiated in seeking to meet our customers’
broader business needs, not just their new capital infrastructure
construction and maintenance. Consultancy services grew to 17%
of FY 25 Group revenues (FY 24: 12%). In addition to the Urenco,
EDF and Sizewell C awards noted above, during FY 25 we won
consultancy business with:
• Department for Energy Security & Net Zero, to provide technical
and strategic consultancy services on the Department’s Energy
and Net Zero Professional Services Framework;
• National Highways, where we secured a place on the Specialist
Professional and Technical Services Framework 3 (SPaTs3)
through the RIS3 road investment cycle;
• Department for Transport, to provide technical and commercial
advice to develop a range of rail infrastructure enhancement
projects in the Western, Wales and Wessex regions;
• Storengy UK, to deliver two FEED contracts to support the
development of their underground hydrogen storage facility in
Cheshire;
• Manchester Airports Group: to conduct two biodiversity studies
at Manchester Airport and East Midlands airport; and
• further design commissions as part of our AMP8 water
framework agreements and Network Rail professional services
framework agreement.
Sustainability performance
Being a sustainable business is fundamental to Costain’s
purpose of improving people’s lives and is central to our vision
to create infrastructure for a more prosperous, resilient and
decarbonised future. Demonstration of sustainability credentials
is often a key component of our customers’ selection process
when awarding new work. Our sustainability programme brings
together the sustainability issues materially important to Costain,
driving towards our medium-term goals as set out in our 2030
Sustainability Programme.
The safety of our people is a core value and an important
component of our sustainability programme. Following several
years of improving safety performance to industry-leading levels,
culminating in a record performance in FY 24, we saw a rise in
our lost time injury rate (LTIR) to 0.16 in FY 25 from 0.11 in FY 24,
although other safety metrics showed improvement in the year.
LTIR is calculated as the ratio of the total number of lost time
incidents per every 100,000 hours worked.
We made good progress towards many of our 2030 sustainability
goals during FY 25, including:
• a reduction in our gender and ethnicity pay gaps;
• the creation of over £600k of social value as we implemented our
social value plan and celebrated Costain's 160th anniversary with
an employee volunteering campaign;
• an average score of 46/50 in the Considerate Constructors
Scheme (industry average of 41/50);
• a reduction in environmental incidents, waste and water
consumption;
• a 41% year-on-year decrease in emissions and continued
improvements to data collection following the introduction of our
Environmental Construction Data Tracker in 2024; and
• retention of the Green Economy Mark, recognising that our
revenue exceeds the 50% 'green income' threshold.
The above strategic progress is supporting our goal to be admired
as a valued partner by our customers and supply chain, as a
trusted employer and community partner, and as a business that
delivers increasing and sustainable shareholder returns.
Outlook
Strong market momentum and increased forward work position
underpins our growth prospects. We are well placed to capture
the substantial multi-year growth opportunities that exist across
all our chosen markets. Our confidence is underpinned by our
strategic long-term relationships with customers and the strength
of our forward work and balance sheet. As we deliver these
higher volumes of work, we will remain focused on maintaining the
rigorous contract management disciplines that have led to today’s
high-quality contract portfolio and industry-leading margins.
We expect to remain highly cash generative and to deliver
progress in both revenue and adjusted operating profit in
FY 26 with an adjusted operating margin of around 4.0% for
the full year, in line with market expectations, as the positive
contract completions in FY 25 are not expected to repeat in FY
26, and as we invest in the business to support the attractive
growth opportunities. We continue to expect a step change in
performance in FY 27 and beyond, driven by the step up in our
customer’s investment spending plans and growth across all our
markets, and our ambition remains to deliver improving operating
margins in excess of 5.0%.
Alex Vaughan
Chief Executive Officer
9 March 2026
07Strategic Report Governance Financial StatementsOverview
Our Vision, Purpose and Strategy
Overview
Costain has been improving the lives of people through
infrastructure for more than 160 years. Our vision is to create
connected, sustainable infrastructure enabling people and
the planet to thrive, creating a sustainable future for a more
prosperous, resilient and decarbonised UK.
The strategy laid out above supports the delivery of our vision,
putting us at the forefront of meeting the UK’s infrastructure
needs with sustainable solutions.
We are strategically well positioned in our four key UK markets,
where there is commitment to long-term investment in
infrastructure: Transport, Water, Energy and Defence.
We build and grow strategic relationships with customers, forging
and deepening long-term partnerships, which supports us in
delivering our growth ambitions and in building an increasingly
resilient customer portfolio. It also enables us to extend our service
offering across the asset lifecycle through the provision of our
engineering-led expertise and capabilities.
We continually identify and deliver improvements to our approach
to enhance productivity and drive predictable best-in-class
delivery, and constantly strive to be an organisation admired by
all of our stakeholders for how we operate, our sustainability
credentials, and the outcomes we deliver.
Our key financial metric to measure our performance over the
past three years has been adjusted operating margin, which
we selected as the best indicator of the quality of our contract
portfolio and earnings. Our adjusted operating margin is industry
leading. In FY 24 we exceeded our 3.5% target margin run-rate
to be achieved during the year, and in FY 25 we have again
exceeded our 4.5% target margin run-rate.
Improving people’s lives
Purpose
Vision
Sustainable future
Strategic focus
Markets and
customers
Expertise
To create connected, sustainable infrastructure enabling people and the planet to thrive
A more prosperous UK A more resilient UK A decarbonised UK
Working strategically with Tier 1 customers to meet critical national needs
We deilver strategic capital programmes and provide valued consultancy services through our broad capabilities
Road
Integrated
Transport
EnergyRail Water
Defence and
Nuclear Energy
Transport Natural Resources
A resilient
customer
mix
To be an
admired growing
company
Growth in
strong
markets
Predictable
best-in-class
delivery
A meaningful
consultancy
service
The strong margin performance over the past three years reflects
the rigorous risk management processes and disciplines that
have been firmly embedded into the business, the operational
improvements brought about by our three-year transformation
programme, and our mix of contracting and consultancy work.
Engineering
and construction
Advisory
solutions
Delivery partner
Maintenance
and renewals
Engineering
and design
08 Costain Group PLC | Annual Report and Accounts 2025
Procure
Construct
and install
Commission
Operate
Maintain
and
renew
Optimise
Strategy
and
delivery
Concept
and analysis
Solution
design
Operate and optimise
We help operate, maintain and optimise
infrastructure, and provide advice on
deconstruction and decommissioning
Deliver
We create sustainable projects with
carbon, social value and nature at the
core of our approach
Shape and create
We use our construction and
engineering expertise to design
the right approach
Our business is differentiated in seeking to meet our customers’ broader business needs, not just the construction and maintenance of
their capital infrastructure.
Within our chosen markets we work with a growing number of customers who choose to work with their partners on strategic
five-to-ten-year programmes of work. The nature of these contracts allows us to build strong, long-lasting and valued relationships,
broaden our service value, and maintain consistency and continuity of workflows over the business plan period.
Below is an example of how our strategy and business model enables our engineering-led expertise to benefit our growing customer
base in the nuclear energy sector.
Bringing our strategy to life – Nuclear energy case study
A business model focused on meeting our customers' broad needs
Powerful market growth drivers
Government policy Climate change
Energy security Geopolitics
Nuclear capability
Extending and optimising
existing energy generation
Safeguarding the UK’s nuclear legacy
ConsultancyKey: Construction Construction & Consultancy
Powering the UK’s nuclear future
EDF
Project controls
services
Contract to 2030
Partner since 2017
Sellafield
Decommissioning
delivery partner
NRS
Decommissioning
delivery partner
Contract to 2040
Partner since 2005
Contract to 2029
Partner since 2005
Urenco
Delivery, design and
construction partner
Sizewell C
Consultancy and
advisory
Contract to 2028
Partner since 2025
Contract to 2035
Partner since 2025
09Strategic ReportOverview Governance Financial Statements
Market Overview
We are strategically well positioned in our four key UK markets, where there
is commitment to long-term investment in infrastructure: Transport, Water,
Energy, and Defence. Within our Transportation division, we have three key
sectors of operation: Road, Rail and Integrated Transport. The remaining
sectors are managed through our Natural Resources division.
We have increasing confidence that we are strategically well positioned in our chosen long-term attractive growth markets, based on:
• the UK Government's 10-year Infrastructure Strategy and Infrastructure Pipeline, which were published in the summer and which
provide greater clarity on £725bn of investment; and
• regulated determinations in water, energy and aviation, combined with non-regulatory expansion plans (such as potential strategic
reservoirs and airport expansion), that are expected to result in significant increases in future investment in these sectors.
Strategic investment programmes – infrastructure spend
1
Committed
investment
1
Investment
period 2026 2027 2028 2029 2030 2031 2032
National and local
roads
£24bn 2026–2030 Motorway and local road improvements
5
High Speed Rail £25bn 2026–2030 HS2 Phase 1 (London–West Midlands)
6
Network Rail £43bn 2024–2029 CP7 CP8
Other rail
enhancements
£10bn 2026–2032 Rail enhancements (outside of CP7)
Local and
regional
transport
£21bn 2022–2032 CRSTS
2
Transport for City Regions (TCR)
£9bn 2026–2030 TfL
7
Aviation £65bn 2022–2039 Airport upgrades and expansion
Water £104bn 2025–2030 AMP8 AMP9
Energy
£9bn 2026–2030 CCUS
£6bn 2026–2030 GB Energy
3
£28bn 2026–2031 RIIO-3
£22bn 2023–2028 RIIO-ED2 RIIO-ED3
Defence £144bn
4
2026-2030 Public defence spend
Nuclear Energy
£14bn 2026-2030 Nuclear decommissioning
£2bn 2026-2030 Small modular nuclear reactors
£3bn 2026-2030 Nuclear fusion
£14bn 2026-2030 Sizewell C
1 These investment plans are not all addressable by Costain and there are market opportunities, which do not fall under these investment plans, available to the Group.
The estimates are as of 9 March 2026.
2 City Region Sustainable Transport Settlements.
3 Excludes nuclear spending.
4 Capital spending only (excludes resource spend; however, includes non- addressable equipment spending).
5 Announced commitment spend, awaiting announcement on National Highways RIS3 spend.
6 Commitment spend in Parliament period – total investment to completion will be higher but no formal, up-to-date, estimate published.
7 2026 TfL business plan.
1010 Costain Group PLC | Annual Report and Accounts 2025
Road
The upcoming Road Investment Strategy
3 (RIS3) programme is expected to result
in broadly stable investment levels, with a
shift in spending from major national road
projects to renewals and maintenance.
There is expected to be a greater emphasis
on the local roads sector with investment
targeted at unlocking new infrastructure
and housing schemes.
Road committed spend
£54bn+
Water
AMP8 capital investment programmes
are forecast to be double the size of
AMP7, with further increases expected in
AMP9 and beyond as water companies
upgrade ageing infrastructure. The
strategic reservoir programmes are not
included in the committed spend figures
and represent additional investment
opportunities.
Water committed spend
£104bn
Rail
The government is committed to
completing HS2 Phase 1 from London to
Birmingham. Network Rail's CP7 focus is
on renewals and maintenance rather than
large projects, with the fastest growth in
investment taking place with regional and
devolved authorities, and on projects such
as Northern Powerhouse Rail and the East
West Rail schemes.
Rail committed spend
£78bn+
Energy
Significant investment is expected over
the medium term in capacity-constrained
electricity networks and renewables
connectivity, together with sustained
investment in oil and gas distribution as
the energy transition market continues to
mature. There is also record investment in
the Great Grid Upgrade.
Energy committed spend
£65bn+
Integrated Transport
Major airport modernisation, notably
by Heathrow and London Gatwick, is
expected to drive strong growth in this
sector, with the government proactively
encouraging and prioritising this as a
means of attracting private investment.
This investment is expected to be a mix of
airport upgrades, capacity and enabling
infrastructure projects as well as a planned
third runway at Heathrow.
Integrated Transport committed spend
£65bn+
Defence and Nuclear
Energy
Geopolitical uncertainty is leading to
significant investment in national security,
including defence infrastructure, as well as
a renewed focus on civil nuclear energy
as a source of energy resilience. The
government is committed to long-term
development of the civil nuclear energy
sector (eg construction of Sizewell C, small
modular nuclear reactors).
Defence and Nuclear Energy
committed spend
£177bn+
Transportation sectors
Natural Resources sectors
11Strategic ReportOverview Governance Financial Statements 11
Operational Review-Transportation
Jonathan Willcock
Managing Director, Transportation
We are encouraged by the UK Government’s 10-year
Infrastructure Strategy and Infrastructure Pipeline, which sets out
plans to increase investment in Transport (excluding HS2) in the
medium term, notably in local, regional and devolved transport
(such as the Northern Powerhouse Rail, East West Rail schemes
and regional road infrastructure), together with the regulatory
commitments and major expansion plans that will increase
investment in the aviation sector.
Road revenue declined by 49.8% to £165.8m, driven by a
reduction in National Highways schemes revenue as several
historic RDP framework projects reached completion, partially
offset by growth with TfL. As a strategic partner for National
Highways, we support their key investment programmes through
the RDP major projects frameworks, the Specialist Professional
and Technical Services (SPaTs) consultancy frameworks, and Area
14 highway maintenance contract.
On RDP, in Cornwall we opened to traffic a critical piece of
infrastructure with a new stretch of A30 dual carriageway
between Chiverton and Carland Cross. Our work to upgrade the
A1 around Newcastle was also successfully completed at the end
of 2025. We are progressing the detailed design phase of the
M60 Simister Island scheme, which has been confirmed as part
of the Infrastructure Pipeline, and we won a place on the SPaTs3
framework to provide technical and engineering services through
National Highways’ RIS3 road investment programme for the
period 2026 to 2031.
Within the Smart Motorways Programme (SMP) Alliance, we
completed the delivery of the M6 Junction 21a-26 smart motorway
upgrade, and our work to support the National Emergency Area
Retrofit (NEAR) programme on the M1, through the design and
delivery of 41 additional emergency areas for smart motorways,
opened ahead of schedule. This programme of work is now
complete.
With TfL we increased the volume of work, progressing contracts
at Gallows Corner and Brent Cross and completing critical works
on the A40 Westway, and we continue to support TfL’s CCTV
service.
During 2025, we won a place on a multi local authority framework
with the Eastern Highways Alliance (EHA), covering civil
engineering and construction works across the road network of 11
• Revenue of £605.3m was down 28.4%, as previously
announced, reflecting significantly lower revenue in Road,
due to the completion of historic RDP framework projects,
and lower revenue in Rail, due to the development of a new
integrated programme schedule for HS2, which moved
work into FY 26 and future years, partially offset by strong
growth in Integrated Transport due to our expanding work
at Heathrow.
• Adjusted operating margin increased by 60bps to 4.1%,
reflecting the positive impact of normal course of business
contract completions in Road, and the lower volumes of
historic RDP road projects, which operated at below normal
margin levels.
• Our forward work position for FY 26 is £616m as at 31
December 2025.
Costain Group PLC
| Annual Report and Accounts 2024
1212 Costain Group PLC | Annual Report and Accounts 2025
Discover more on our website / ww w.costain.com
local authorities in the east of England. This is the first time Costain
has been awarded a place on a multi local authority schemes
framework. This is of strategic importance given the greater
emphasis on the local roads sector in the coming years, with
investment targeted at unlocking new infrastructure and housing
schemes.
In January 2026, we announced the award of a contract to design
and build a new junction on the M5 in Somerset to provide access
to the planned Agratas factory, which will be Britain’s biggest
electric vehicle battery manufacturing facility.
Rail revenue decreased by 25.1% to £344.3m, principally because
of the revised schedule for HS2, which moved work into FY 26
and future years, as previously announced. During FY 25, the
last of the tunnel boring machines (TBMs) in the Northolt Tunnel
successfully completed their drives safely and on schedule, a
major milestone for the HS2 project as it completed the twin-bore
tunnel between West Ruislip and Old Oak Common.
Work has now begun on the tunnel from Old Oak Common to
Euston, with the first TBM beginning its drive in Q1 26. Above
ground there is significant work in delivering key infrastructure
to support the new railway. As previously announced, the HS2
programme continues to be navigating a change in its programme
delivery strategy, with an integrated programme being developed.
We continue to expand our portfolio of work for Network Rail
and DfT through our professional services consulting framework
contracts.
Integrated Transport revenue increased by 71.2% to £95.2m,
reflecting the growing volumes at Heathrow where we are
upgrading the Terminal 2 baggage handling facilities and systems.
We are involved in several other key projects at Heathrow, such
as replacing the cladding on the main road tunnel in and out of the
airport.
We also continue to support Manchester Airports Group at East
Midlands, Manchester and London Stansted airports, and we have
been awarded a place on two framework contracts at London
Gatwick airport, to cover a range of capital projects to upgrade
and modernise the airport’s infrastructure. As a result, we are
now working for the three largest aviation customers in the UK, a
market where we see strong medium-term growth potential driven
by regulatory commitments and major expansion plans.
Divisional results – Transportation
FY 25
1
FY 24
1
Change
1
Road 165.8 330.3
2
-49.8%
Rail
344.3 459.9
2
-25.1%
Integrated Transport
95.2 55.6 71.2%
Total revenue 605.3 845.8 -28.4%
Operating profit/(loss)
24.9 29.9 -16.7%
Operating margin 4.1% 3.5% 60bps
1 On a reported and adjusted basis. See notes 2 to 4 of the financial statements for adjusted metric details and definitions, and reconciliation to reported metrics.
2 Road and Rail in FY 24 includes revenue previously included in Integrated Transport, reported within Road and Rail from the start of FY 25.
13Strategic ReportOverview Governance Financial Statements 13
Operational Review - Natural Resources
Peter Mumford
Managing Director, Natural Resources
Water revenue was stable at £250.8m, a good performance
given the water industry was transitioning from the delivery of
AMP7 to early design work in the AMP8 regulatory cycle and
Tideway neared completion. We provide a broad range of services
to improve asset and operational resilience across the sector,
together with decarbonisation capabilities.
We delivered a very strong close to AMP7, achieving 100% of our
regulatory date commitments on behalf of our customers across
over 100 projects. Our focus has now moved to the successful
mobilisation of the AMP8 capital delivery programmes for both
existing AMP7 customers (Anglian Water, Severn Trent Water,
Southern Water and Thames Water) as well as our new AMP8
alliances with United Utilities and Northumbrian Water. We also
have a managed service provider contract with United Utilities
and a professional services contract with Yorkshire Water.
Following our successful contract awards in FY 24 we have good
visibility across 2025-2030 and continue to expect a doubling
of investment in AMP8 compared to AMP7, to over £100bn. The
AMP8 investment is expected to peak in 2027-2029 and is a
key component of the expected step change in the Group’s
performance in FY 27 and beyond. These high levels of investment
are expected to continue into AMP9, which runs from 2030-
2035. Our contracts with United Utilities, Northumbrian Water and
Southern Water extend through to the end of AMP9.
Water resilience is a critical area of focus for the industry, and in
June 2025, we announced a five-year extension to our Strategic
Pipeline Alliance contract with Anglian Water to improve resilience
to drought and climate change by transferring water from wetter
regions to drier parts of the east of England. During the year, our
work for Tideway, where in a joint venture we are responsible
for building the eastern section of London’s new ‘super sewer’,
became operational, bringing significantly greater environmental
resilience to London.
The breadth of our service offering continues to grow; for
example, it now includes constructability advice to customers as
they design new strategic reservoirs. We secured a key position
supporting the South East Strategic Reservoir Option (SESRO)
project, positioning us well for future reservoir programmes over
the next 10 years.
Energy revenue increased by 39.0% to £64.2m. We provide
our customers in this sector with a range of services including
engineering design, managed services and programme
management, solving our customers’ complex energy challenges
through excellence in engineering and delivery.
Operational Review-Natural Resources
• Revenue increased by 8.7% to £440.4m, reflecting growth
in Energy and Defence and Nuclear Energy, with stable
revenues in Water as the industry transitioned from AMP7
to AMP8 and Tideway neared completion.
• Divisional adjusted operating profit increased to £35.0m
(FY 24: £23.8m), and adjusted operating margin increased
by 200bps to 7.9%, reflecting a higher mix of consultancy
revenue and positive normal course of business contract
completions as AMP7 concluded.
• Our forward work position for FY 26 is £500m as at 31
December 2025.
Costain Group PLC | Annual Report and Accounts 2024
1414 Costain Group PLC | Annual Report and Accounts 2025
In energy transition (hydrogen and carbon capture), we continue
to support bp with the design and delivery of its leading industrial
scale carbon capture programme. We were awarded two FEED
contracts with a new customer, Storengy UK, for its pioneering
underground hydrogen storage project in Cheshire. We also
continue to provide studies to Wales and West Utilities to assist
them as they develop their hydrogen vision.
In energy connectivity (gas and electricity networks), we continue
to manage the safety-critical gas mains replacement programme
for Cadent in the east of England, achieving very high customer
satisfaction scores. Ofgem has an £80bn investment programme
planned for the RIIO-3 regulatory period from 2026 to 2031 to
maintain critical gas networks and upgrade the UK’s electricity
grid. This is four times the level of investment made during RIIO-2,
with the first £28bn tranche of this programme now approved,
and we continue to expect strong growth opportunities as the UK
embarks on its ‘Great Grid Upgrade’.
Defence and Nuclear Energy revenue increased by 16.5% to
£125.4m, driven by growth within our current delivery partnership
roles for executive non-departmental public and government
bodies and with Tier 1 companies. During the period, we completed
extensive upgrades to the dock infrastructure at Devonport for
Babcock, to enable Royal Navy submarines to undergo critical
maintenance before returning to sea, and we continued to support
the Atomic Weapons Establishment (AWE) as their construction
delivery partner to deliver major infrastructure projects.
We made significant progress in the nuclear energy sector in
FY 25. In October, we announced the award of a major delivery
partnership contract with Sellafield, worth up to £1bn over 15
years, to deliver critical utilities infrastructure upgrades, thereby
extending a relationship that began in 2005. We also extended
our project controls services contract with EDF to support their
fleet of nuclear power stations for a further five years, and
won a contract with Nuclear Restoration Services (NRS) for
decommissioning work at a nuclear power station in North Wales.
In March, we added Urenco as a new customer, securing a
programme delivery partner framework to deliver new and
upgraded infrastructure at its Cheshire site and then an additional
design services FEED for Europe’s first commercial scale high-
assay low-enriched uranium facility.
This facility will provide the fuel for the small modular reactor and
advanced modular reactor units for Rolls Royce as part of Great
British Nuclear’s drive to deliver cheaper, cleaner and more secure
energy. We also won a 10-year framework with Sizewell C to
provide engineering, project delivery and quality control expertise
to support the construction of the new nuclear power station.
Geopolitical uncertainty is leading to significant investment in
national security, including defence infrastructure, as well as
a renewed focus on civil nuclear energy to improve energy
resilience, and the government is committed to long-term
development of the civil nuclear energy sector. As a result, we
continue to see strong medium-term growth opportunities in
Defence and Nuclear Energy and are well positioned across the
Defence Nuclear Enterprise.
Divisional results – Natural Resources
FY 25
1
FY 24
1
Change
1
Water 250.8 251.5 -0.3%
Energy 64.2 46.2 39.0%
Defence and Nuclear Energy
125.4 107.6 16.5%
Total revenue 440.4 405.3 8.7%
Operating profit/(loss)
35.0 23.8 47.1%
Operating margin 7.9% 5.9% 200bps
1 On a reported and adjusted basis. See notes 2 to 4 of the financial statements for adjusted metric details and definitions, and reconciliation to reported metrics.
15Strategic ReportOverview Governance Financial Statements 15
2023 £40.1m
2024 £43.1m
2025 £47.1m
2023 12.2p
2024 14.6p
2025 14.5p
2023 £72.0m
2024 £27.1m
2025 £63.1m
Key Performance Indicators
Our Key Performance Indicators (KPIs) are aligned with how we measure our performance against our
strategic priorities.
Financial metrics
Relevance
Measure
Target
Performance
We belive that an increase in
adjusted operating profit
1
and
improved margin is the best indicator
of the improved quality of our
contract portfolio and earnings.
Growth in adjusted operating profit
will also be enhanced by growth
in the volume of work, which we
expect to increase following the UK
Government's 10-year Infrastructure
Strategy and regulatory spending
increases in the water, energy and
aviation sectors.
As our business becomes more
efficient and revenue mix shifts
to include more higher-margin
consultancy work, we expect this to
be reflected in the operating profit
margin. We have identified areas
for operational efficiency, some
of which we anticipate adding to
the bottom line and supporting our
margin. Adjusted operating margin
is calculated as adjusted operating
profit divided by adjusted revenue.
We believe that adjusted EPS, while
not perfect, is an accessible measure
of the returns we are generating
for our shareholders and reflects
both revenue growth and operating
profit margin. It also acknowledges
that historically, shareholdings have
been diluted through share issues.
Adjusted EPS is calculated based
on the adjusted profit attributable
to equity shareholders
1
, divided by
the basic weighted average number
of ordinary shares ranking for any
dividend in the period.
In a business with small operating
margins, profitability alone is not an
adequate measure of performance or
balance sheet strength; it is possible
to deliver better margins, but poor
value for shareholders if that profit is
not converted into cash.
Adjusted operating profit
1
. Adjusted operating profit margin
1
. Adjusted basic earnings
per share
1
.
Adjusted free cash flow is defined
as net cash flow from operating
activities, excluding cash flow
relating to adjusting items, less
capital expenditure.
Double-digit compound growth
in the medium term.
We exceeded our target 4.5%
adjusted operating margin
1
run-rate
during the course of FY 25. Our
ambition is to reach an annual
adjusted operating margin in excess
of 5.0%.
We target adjusted EPS growth
in line with our strategy to grow
operating profit.
Cash conversion rate of 90%.
Adjusted operating profit
1
growth of
9.3% reflected the improved quality
of the contract portfolio and volume
growth in Natural Resources.
Adjusted operating margin
1
was 4.5%
for the year and 5.8% in the second
half (being the run-rate during the
course of FY 25), benefiting from the
increase in adjusted operating profit
and the lower volumes of completed
historic RDP framework projects,
which operated at below normal
margin levels.
Adjusted EPS
1
was broadly flat in FY
25, with the improvement in adjusted
operating profit
1
and lower share
count following the share buyback
programmes offset by a higher
adjusted effective tax rate and lower
net interest income.
Free cash flow in FY 25 reflected
year-end timings of working capital
as well as higher tax payments,
partially offset by lower pension
deficit contributions and capital
expenditure payments.
1
See notes 2 to 4 of the financial statements for adjusted metric details and definitions, and reconciliation to reported metrics.
2
See page 31 for details of a restatement related to the past four years' greenhouse gas emissions data.
Adjusted operating
profit
1
£47.1m
Adjusted operating
profit margin
1
4.5%
Adjusted basic earnings
per share
1
(EPS)
14.5p
Adjusted free
cash flow
£63.1m
2024 3.4%
2025 4.5%
2023 3.0%
1616 Costain Group PLC | Annual Report and Accounts 2025
2023 0.12 LTIR
2024 0.11 LTIR
2025 0.16 LTIR
2023 £460k
2024 £410k
2025 £290k
2023 294,840tCO2e
2024 297,123tCO2e
Non-financial metrics
Effective health and safety
management systems are critical in
preventing incidents which could
cause injury to people and damage
to property and reputation.
We have an ambition to become a
net zero business by 2045.
It is fundamental that we not only
reduce the carbon produced in
our operations and our customers’
operations, but also what becomes
embedded in what we build. Further
detail on the calculation of our GHG
emissions can be found on page 31.
We are committed to being a trusted
community partner and one that
genuinely adds social value. We have
a responsibility to understand the
needs of local people and, where
possible, work with them to make a
lasting difference.
Social contribution is defined as
the sum of charitable/community
donations, employee fundraising,
and the social value resulting from
employee volunteering.
Lost Time Injury Rate (LTIR), which
is calculated by dividing the number
of lost time injuries by the number of
hours worked, multiplied by 100,000.
Absolute GHG emissions
(Scopes 1, 2 and 3).
Community investment.
Target is to keep LTIR less than 0.15. Net zero GHG emissions by 2045.Annual contribution of 1% of
post-tax profit.
Following several years of improving
safety performance to industry-
leading levels, culminating in a record
performance in FY 24, we saw a rise
in our LTIR to 0.16 in FY 25, slightly
above target, although other safety
metrics showed improvement in the
year.
In FY 25 absolute emissions
decreased by 41% year on year
and when normalised by turnover
(tCO
2
e/£m) emissions reduced by
46% compared to our 2021 baseline.
In FY 25, we celebrated Costain's
160th anniversary with an employee
volunteering campaign, which
benefited over 20,000 community
members through 7,500 hours
of employee volunteering. This
contributed to the creation of over
£290k of social contribution.
Discover our full GHG disclosure /
pages 30 and 31
Safety
0.16 LTIR
Environmental impact²
175,078tCO
2
e
Social contribution
£290k
2023 294,840tCO2e
2024 297,123tCO2e
2025 175,078tCO
2
e
17Strategic ReportOverview Governance Financial StatementsGovernance Financial StatementsOverview 17Strategic Report
S172 Statement
Engaging with our stakeholders
Our commitment
to stakeholders
We set out here how we engage
with each of our stakeholder groups.
Each stakeholder group requires a
tailored engagement approach to
foster effective relationships. By
understanding our stakeholders and
listening to their views and feedback,
we can factor into Board discussions
the potential impact of our decisions
on each stakeholder group and
consider their needs and concerns.
The information included in the
table to the right and on pages
20 to 21 shows how the Directors
have performed their duties under
Section 172 of the Companies Act
2006, having regard to a range of
stakeholder feedback.
Signed by the Board
9 March 2026
Workforce
• Board members, including the newly appointed Workforce Engagement Director,
took part in site visits and Q&A sessions with our people.
• We held two leadership impact days where people took part in health and safety
and engagement discussions (attended by Board members).
• We held two all-employee webinars, giving employees a chance to put questions
to the Executive Board and hear an update on Group strategy.
• We conducted our annual Group-wide engagement survey and continued our
Your Voice employee forum.
• We developed and enhanced our new HR system and delivered tailored training
sessions to improve the user experience.
• We launched and rolled out our Career Pathways initiative.
• Developed skills, capabilities and talent, such as with the Empower, First-Time Line
Managers, Emerging Leaders and Accelerate development programmes.
• The Workforce Engagement Director took part in a celebration of Women in
Engineering day.
• The CEO is the Infrastructure sector representative on the government’s
Construction Skills Mission Board, which is focused on building the skills and
capability needed to realise the delivery of resilient, sustainable infrastructure in
the UK for future generations.
Suppliers
Communities
and environment
• The Board is updated at each meeting with a SHE and Sustainability Report and
undertook a deep dive on sustainability in 2025.
• The Board has also now established a Sustainability Committee to provide additional
oversight and guidance with respect to our sustainability strategy and actions, and
to ensure they receive the time and attention they deserve.
• To keep connected with societal challenges four Costain colleagues serve as
regional board members for Business in The Community (BiTC). The CPSO is serving
as a member of the BiTC wellbeing leadership group and the CEO is a member of the
leadership council.
• In 2025, the CEO, CFO and an MD attended prison visits with Key4Life and the
CEO additionally attended a community visit close to Costain's bp project in
Teesside with other business leaders, to understand the specific challenges in this
community,
HOW WE ENGAGED
• The Board received presentations on major customers to understand
opportunities and challenges, together with work-winning updates on multiple
other customers from across the business.
• Our CEO engaged with most of our major customers, including HS2, National
Highways, Heathrow, Babcock, Southern Water, Anglian Water, bp and Cadent,
and our Chair met with the chair of HS2.
• We took customers on site visits to flagship projects, helping to showcase our
capabilities and the quality of work across our portfolio.
• We attended strategic customer events such as the opening of the eastern region
of Tideway, as well as industry associations events.
Customers
• Our Chair met with significant shareholders holding a total of 33% of the
Company’s shares.
• The CEO and CFO held 42 meetings with investors and potential investors,
including the holders of around 45% of the Company’s shares. Meetings were held
physically and virtually, both on a one-to-one and a group basis, following the
announcement of our full-year and half-year results and at broker conferences.
• Members of the Executive team, together with the CEO and CFO, met with
analysts and significant shareholders at a Heathrow site visit in June 2025.
• The Chair of the Remuneration Committee engaged with our largest shareholders
in connection with the refresh of the Director's Remuneration Policy.
Shareholders
• The Procurement and Supply Chain managers provide a crucial link with suppliers,
developing strong, enduring relationships to ensure the best solutions for our
customers.
• We have engaged with the supply chain through several channels, including SME
Academy and Meet the Buyer events providing the supply chain with insights into
Costain’s strategies, including sustainable procurement and production thinking.
• We have invested in upskilling programmes with the supply chain, utilising
resources such as Supply Chain Sustainability School as well as internal expertise
on key issues such as health and safety, carbon, modern slavery and sustainable
procurement.
• We are refining our approach to Supplier Relationship Management and working
with our projects to apply a consistent approach to engaging with our supply
chain.
18 Costain Group PLC | Annual Report and Accounts 2025
• Q&A topics include strategy, future pipeline of work and capacity and capability
required to deliver it, safety, wellbeing and internal mobility.
• Addressing some of our key risks and strategic priorities, the leadership impact
day themes were based around ‘safety’, ‘wellbeing’ and ‘engagement’.
• Our engagement survey provides feedback on leadership, the Company,
managers, teams, wellbeing, personal growth, giving something back and fair
deal. In addition, we ask a series of bespoke questions about safety, culture,
advocacy, communication and career progression.
• The Your Voice forum focused on key themes: HR system, expenses and
subsistence policies, communication and other policies.
• The Workforce Engagement Director delivered a report after each site visit and
formally reported back to the Board twice during the year.
• Deep dives into Senior Leadership Talent and Skills and Contingency Planning/
Succession.
DISCUSSIONS AND ACTIONS
• We had a 75% response rate to our engagement survey (consistent with our
response rate in FY 24), giving us good insight into the things our people
value about Costain and what they would like us to focus on to improve their
employee experience further.
• We have used workforce feedback (eg from the engagement survey, Your Voice
employee forums and line manager briefings) to inform targeted actions.
• We have listened to employee feedback on the new HR system to improve
processes such as performance appraisal during the year.
• Following feedback from a site visit to Heathrow our Workforce Engagement
Director undertook a visit to the night shift at Heathrow.
OUTCOMES
• How-to-Buy (H2B) processes, governance and coverage were fully embedded
across plant and materials, ensuring leaner processes, greater transparency and
more consistent application of policy. H2B processes were also relaunched for
subcontracts and indirects to improve predictability and control.
• We refreshed our sustainable procurement and supply chain policy, positioning
sustainable procurement as a strategic enabler aligned to ISO 20400.
• We have developed clear performance reporting to ensure clarity as to supplier
performance and are seeing an increase in performance scoring underpinned by
a strengthened Supplier Relationship Management (SRM) approach.
• Category management was refined in 2025 at both direct and indirect levels.
Working with our supply chain we identified best-in-class activities across
categories and category strategy priorities to support our aim to achieve
predictable delivery across the supply chain.
• Company car fleet emissions reduced by 26g/km CO
2
, with 98% of the
company car fleet on the road now ULEV/LEV, evidencing tangible progress on
low-carbon procurement choices.
• Strategic, production-led engagement included visits to key manufacturing
facilities and early contractor involvement workshops on schemes such as the
M60 Simister Island, with suppliers shaping modular and offsite solutions to feed
into Costain’s service offering.
• Our local communities have been keen to discuss construction activity,
opportunities for local businesses, community skills programmes and job
opportunities.
• We stay connected with our local communities to inform them of any operational
impact they may experience from our work and maintain a service level
agreement for customer contact.
• Costain senior leaders took part in various BiTC events
.
• The Board received a presentation from an Oxford University Professor of
Climate and Environmental Risk to the Board at our Strategy Day.
• Recognised by the Considerate Constructors Scheme, averaging 45.7 compared
to the industry average of 41 (out of 50). Every contract has an individual or team
responsible for community/stakeholder relations.
• We have been named one of Europe's Climate Leaders by the Financial Times.
• Retained the London Stock Exchange's Green Economy Mark.
• Achieved Platinum-level membership through this year’s employer audit of The 5%
Club with over 10% of employees ‘earning and learning’.
• Creation of over £1m of social value as we implemented our social value plan and
celebrated Costain's 160th anniversary with an employee volunteering campaign.
• We are spending more time with our customers, ensuring we are helping them
meet their needs.
• A deep dive on securing new work and responding to changes in customer
spending plans.
• Held a panel discussion with Chief Economist and Head of Research of Panmure
Liberum and Global Head of Infrastructure at KPMG on our market future and
outlook.
• Our forward work position has reached a record level of £7.0bn.
• We use working groups to better support our customers with upcoming
projects, emphasising the importance of best-in-class delivery for customers.
• We refreshed our strategic business plan to take into account our customers’
changing requirements.
• We transferred learning from one sector to another through lessons learned
workshops and by moving team members to maximise cross-sector learning.
• We were recognised for our activities by winning awards and accreditations,
such as our A30 team winning the 2025 Health, Safety and Wellbeing Excellence
award at the Construction News Awards.
• We engaged with shareholders on current trading, market developments, the
UK Government's Infrastructure Strategy, margin progression, dividends, capital
allocation, remuneration policy and the £10m share buyback in the summer of
2025.
• We addressed shareholder queries ahead of, and during, the AGM.
• A new 'Introduction to Costain' presentation was published to assist prospective
investors in understanding the business and investment case.
• The Board received an update from its financial advisers on market challenges,
the competitive landscape and any opportunities for growth. Separately,
our brokers also provided an update on capital allocation options and
provided shareholder feedback after both the half-year and full-year results
announcements.
• We returned £10m to shareholders through the repurchase of ordinary shares
in FY 25. On 10 March 2026, we plan to announce a return of a further £20m to
shareholders during FY 26 via an on-market share buyback programme.
• During the year, our share price increased by 51% from 106 pence to 160 pence
per share.
Overview Financial Statements 19Strategic Report Governance
S172 Statement continued
The Board is well versed in their obligations under s172 and ensures all stakeholder views are understood
and considered in Board discussions and decisions. Depending upon the matter at hand, this could include
consideration of the views of, for example, shareholders, customers, employees, supply chain, lenders, the
communities within which the Group operates, and end users of its works/services.
Principal decisions: case studies
Share buyback
programme
launched in June
2025
Board discussions: The Board regularly reviews the Group's cash performance, ongoing
capital requirements and optimal capital allocation. In June 2025, the Board discussed the
results of the annual valuation of the Group’s defined benefit pension scheme, which had
resulted in a scheme surplus of more than 101%. This meant both scheme contributions
and the 'dividend parity' arrangement were suspended from 1 July 2025 to 30 June 2026,
providing the Group with the ability to return any surplus capital to shareholders without
triggering a matching contribution to the pension scheme.
The Board considered the Group’s uses of capital and concluded that a £10m on-market
share buyback programme was an appropriate and value-enhancing use of cash, while
maintaining the Group’s financial flexibility to continue to invest in its strategy to deliver
sustainable growth and attractive returns.
Board’s consideration of stakeholder impact in reaching its decision:
In reaching its decision, the Board obtained advice from its joint brokers and considered
shareholder feedback that highlighted a desire for surplus capital to be returned to
shareholders, provided that the Group retained a strong net cash position to provide
appropriate headroom to manage working capital, confidence to our customers and
supply chain, and resilience in connection with the Group’s operations.
The Board also noted that it had implemented a £10m on-market share buyback
programme in 2024 following the valuation of the Group’s defined benefit scheme in the
preceding year, which had been well received.
The Board considered that, over the past three years, the Group had improved the quality
and size of the Group’s contract portfolio, delivered on its margin targets, significantly
strengthened its net cash position (from £123.8m at the end of FY 22 to £158.5m at the
end of FY 24), and in May 2025 it had successfully refinanced its bank and bonding
facilities. In the Board’s view, this gave the Group the financial strength and capability to
support its future growth opportunities, while returning £10m of capital to shareholders
via an on-market share buyback programme and still retaining significant headroom for
investment.
A share buyback programme was preferred over a special dividend as it gave more
flexibility than a special dividend, being capable of being adjusted or halted part way
through if alternative superior uses of capital were identified.
Key stakeholder groups:
Workforce Customers
Communities and
environment
Shareholders Suppliers
Key stakeholder groups:
CASE STUDY 1
20 Costain Group PLC | Annual Report and Accounts 2025
Workforce
Engagement
Director
Board discussions: The Board discussed whether it should nominate a Board member
with specific responsibility for workforce engagement. It was decided that, while all
Board members would still seek to attend operational site visits, and to engage with
our workforce, it would nominate a Director with specific responsibility for workforce
engagement. Amanda Fisher took on the role with effect from 4 March 2025.
Board’s consideration of stakeholder impact in reaching its decision:
The Board considers that an engaged and thriving workforce is vital to maintaining a
successful and sustainable business. In deciding that Amanda Fisher would take on the
role of Workforce Engagement Director, the Board considered the existing workforce
engagement activities undertaken by its members. This includes receiving a people report
(not limited to Costain employees but also including subcontractors and agency workers)
at each Board meeting, receiving a detailed briefing on the results of the Group’s annual
employee engagement survey and a range of existing engagement activities, such as the
bi-annual safety, health and environment impact days, as well as other site visits. However,
there was not a Non-Executive Director with specific responsibility for representing the
views of the workforce at Board meetings.
The Board recognised that other boards have found this a useful practice, and it is one of
the methods for hearing the employee voice specifically recognised by the UK Corporate
Governance Code. Moreover, given the crucial importance of a diverse, engaged and
thriving workforce in meeting the Group’s objectives, the Board considered the role
would benefit not just Costain’s employees, sub-contractors and agents, but also benefit
Costain’s customers and shareholders by aiding the delivery of these objectives and
promoting the long-term success of the Group.
W
orkforce
E
ngagement
D
D
D
D
D
D
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CASE STUDY 2
Decision-making
in relation to key
customer
Board discussions: During the year, the Chief Executive Officer met regularly with the
project team to discuss rephasing of works for the programme, the customer’s spending
priorities, productivity levels, maintaining the morale of the employees and supply chain
and health, safety and environment performance. The outcomes of these discussions were
reported regularly to the Board via the Chief Executive Update. The Board discussed the
project in detail on multiple occasions during 2025, including at the Board Strategy Day
when key trends in our customer base were discussed.
Board’s consideration of stakeholder impact in reaching its decision:
The Board noted the importance of hearing the customer voice in Board meetings. It
enabled the Board to have visibility of the customer’s needs, to adapt corporate strategy
accordingly, considering the relevant interests of all affected stakeholders, and to agree
and monitor the action plan, which included optimising project resourcing to align with the
revised project timetable.
CASE STUDY 3
Key stakeholder groups:
Key
stakeholder
groups:
Overview Financial Statements 21Strategic Report Governance
Pillar Material issue 2030 goal
Being a responsible
business
Employee health and safety Eliminating harm in all we do
Ethical corporate behaviour Our stakeholders rate us as a responsible business
Sustainable procurement Our procurement is driving supplier emissions reductions and
increased social value
Safeguarding our
planet's future
Decarbonisation and climate change
resilience
42% reduction in absolute emissions (Scope 1, 2 and 3) against
a 2021 baseline
Nature Make a measurable contribution to nature positive
Resource efficiency 30% reduction in water and waste from operations against a
2024 baseline
A trusted employer and
community partner
Employee diversity and inclusion A psychologically safe workplace with an engaged, thriving
and representative workforce
Community and social value Through the duration of this strategy, our solutions and social
value programmes will improve over one million lives
Skills Support the skills development of 500 individuals to gain
meaningful employment
Our sustainability performance
Costain is a trusted delivery partner to
the owners and operators of the UK’s
transport, energy, water, and defence
infrastructure. We know that sustainability
is a business imperative and, if done well,
can be a competitive advantage, reducing
risk and costs. It also helps us attract the
best people and secure new business.
To ensure we are prioritising action on
the most important issues to Costain and
our stakeholders, we complete a periodic
‘double materiality assessment’. This
assessment enables us to understand the
issues that Costain has significant impact
upon and also those issues that impact
Costain’s business operations.
Our sustainability programme brings
together the sustainability issues materially
important to Costain, with clear 2030
goals (see table below). Our sustainability
programme is underpinned by policies,
plans and milestone targets.
2025 summary
The safety of our people is a core value
and an important component of our
sustainability programme. Following several
years of improving safety performance
to industry-leading levels, culminating in
a record performance in 2024, we saw a
rise in our lost time injury rate (LTIR) to 0.16
in 2025 from 0.11 in 2024, although other
safety metrics showed improvement in the
year.
In January 2026, the inaugural
Sustainability Committee approved our
decarbonisation and nature positive plans.
These plans set the near-term actions
required to maintain progress towards our
goal to achieve net zero greenhouse gas
emissions by 2045.
In 2025, we made good progress towards
our 2030 goals. We are pleased to report a
reduction in our gender and ethnicity pay
gaps, reflecting the work undertaken to
attract, retain and develop diverse talent.
While our small and medium enterprise
(SME) spending reduced year-on-year,
there were a notable number of suppliers
reclassified as large businesses in 2025,
materially impacting our spend profile.
We created over £600k of social value
in 2025 and celebrated Costain's 160th
anniversary with an employee volunteering
campaign, which benefited over 20,000
community members through 7,500 hours
of employee volunteering.
We've maintained our strong
environmental performance, reducing
incidents, waste and water withdrawal.
For 2025, we are pleased to report a 41%
year-on-year decrease in emissions and
continued improvements to data collection,
which has significantly improved since
the introduction of our Environmental
Construction Data Tracker in 2024. This
is now giving us a more complete picture
of our emissions. We were pleased to
retain the Green Economy Mark in 2025, a
recognition of our revenue continuing to
exceed the 50% 'green revenue' threshold.
Discover more on our website /
www.costain.com/sustainability
Being a sustainable business is fundamental to Costain’s purpose of improving people’s lives and meeting
our customers' expectations, and is central to our mission to create infrastructure for a more prosperous,
resilient and decarbonised future.
Sustainability
Costain Group PLC | Annual Report and Accounts 20252222
Emissions intensity (Gross tCO
2
e divided by turnover)
Metric tonnes of CO
2
e/£m
2025 2024
2023
2022 2021
Scope 1 5.38 3.81 3.66 4.52 10.14
Scope 2 2.36 0.71 0.97 0.67 0.91
Scope 3 159.46 232.98
1
216.72
1
282.6
1
296.84
1
Total 167.21 237.51
1
221.35
1
287.79
1
307.88
1
Our 2025 progress and performance
Being a responsible business
Considerate Constructors Scheme
Diversity of our workforce Social contribution
A trusted employer and community partner
Safeguarding our planet’s future
33%
2025
Industry average for 2025
2024-45.5
Lost Time Injury Rate (LTIR) Reportable accidents SME spend
45.6
40.8
7,500 volunteered hours
£290k social contribution
£119k
raised/donated to UK charities
2025
2024
0.16
0.15
2025
Target
2024–0.11
29%
33%
2025
Target
2024–41%
11
4
Male
Employees
2024–2,168
2025–2,306
Board members
2024–3
2025–3
Senior management
2024–18
2025– 8
Female
Employees
2024–926
2025–960
Board members
2024–4
2025–4
Senior management
2024–11
2025–10
0.07
0.11
169,446
186,648
2024 2024
2025 2025
Environment Incident
Frequency Rate
Water withdrawal m³
100% 0
² A ‘relevant project’ is one where
Costain is the principal contractor
during either the pre-construction
or construction stage and is over six
months long.
of relevant
2
contracts working
in accordance with PAS 2080
major environmental
incidents
Delivered green revenue in
>50%
1 Please see page 31 for details regarding restated GHG data.
of turnover
23Strategic ReportOverview Governance Financial Statements 23
Sustainability continued
The Task Force on Climate-related Financial
Disclosures (TCFD)
We are pleased to make climate-related financial disclosures
consistent with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations and the requirements of
LR 9.8.6. Our disclosure covers 1 January to 31 December 2025.
We are deepening our analysis of climate impacts to support Costain’s ambition to lead the delivery of
low-carbon infrastructure and accelerate the UK’s transition to net zero.
While these disclosures are not third-party assured, our
greenhouse gas (GHG) emissions data (see page 31) has been
third-party accredited by Achilles per the Toitu Carbon Reduce
scheme and ISO 14064-1 and 3.
Pillar Disclosure response
Governance Costain’s climate-related governance arrangements are outlined on page 25, where we describe the responsibilities of the
Board and Executive Board in overseeing and evaluating climate-related risks and opportunities.
Strategy
Our climate-related risks and opportunities are presented on pages 28 and 29, and our scenario analyses are outlined on
page 27.
Risk management Our climate risk management approach is embedded within our wider risk framework. We outline our risk management
process on page 34, followed by additional detail on Costain’s principal risks – including those related to climate change –
on pages 36 to 39.
Metrics
and targets
The metrics used to track our transition to net zero, assess climate-related risks and support client decarbonisation are
provided on page 30. Costain’s greenhouse gas emissions are disclosed on page 31, with further detail available in our
separate Sustainability Report.
We provide a more detailed update on the progress we have made on Costain’s transition to net zero and how we are aligning our disclosures to the
recommendations of the Task Force on Nature-related Financial Disclosures (TNFD) in our separate Sustainability Report.
www.costain.com/sustainability/reports-and-downloads.
2025 progress
PAS 2080:2023
Costain continues to be a PAS
2080:2023-certified company
following recertification this year.
Alignment with PAS 2080:2023
provides a consistent, value-chain-
wide approach to decarbonisation and
carbon management, reinforcing clear
responsibilities across projects. We
continue to embed these standards,
encouraging early collaboration
on decarbonisation in the design
process and ensuring their consistent
implementation.
Carbon Design Tool
2025 saw the launch of Costain’s
Carbon Design Tool, used to forecast
potential carbon hotspots at the
earliest stages of infrastructure design.
Benchmarking emissions in line with
the latest RICS guidance to optimise
design alternatives, the tool links directly
with our Environmental Data Tracker
to enable teams to proactively reduce
carbon and track on-site performance
against the design baseline.
Together, these tools create an end-to-
end approach to designing out carbon
access the project lifecycle.
Construction Materials
Pathway
Given the materials intensity of our
projects, reducing the embodied carbon
associated with these is essential
to reaching net zero. Our Concrete
Transition Pathway sets out the steps
to decarbonise concrete from a 2024
baseline, focusing on optimised design,
production thinking and the adoption of
new mixes and innovations.
These measures enable a consistent
reduction in the embodied carbon
of concrete used across our sites.
For more detail, see page 30 of our
Sustainability Report.
Sustainable Procurement
In 2025, we moved into the first phase of
our 2025-2028 Sustainable Procurement
Roadmap, relaunching our ISO
20400-aligned Sustainable Procurement
Policy to provide a consistent framework
for integrating environmental, social
and governance considerations into
purchasing decisions.
Our Sustainable Procurement Working
Group drives awareness and pushes
implementation of the policy, with
sustainable procurement independently
embedded into our category strategies
and Supplier Relationship Management
Framework to ensure it informs planning,
sourcing and contracting.
Additionally, in line with our focus on
resource efficiency, we implemented
Safety, Health and Environmental
(SHE) assurance at tender and pre-
construction stages, enabling earlier and
more effective identification of carbon-
reduction opportunities.
2424 Costain Group PLC | Annual Report and Accounts 2025
Climate-related governance
1
Effective climate-related governance underpins our ability to manage risk, seize opportunity, and deliver our strategy in line with our
values. Oversight begins at Board level, which retains ultimate accountability for climate-related matters and ensures our approach
is aligned with wider business objectives. Our governance framework establishes a clear line of accountability and responsibility for
climate-related decision making across the business. Authority is appropriately delegated through Executive leadership, management
and specialist working groups to enable informed oversight and effective risk management. The organisational structure below illustrates
how climate-related governance is embedded throughout Costain, from the Board to operational teams, and highlights the roles and
responsibilities of those accountable for managing climate-related risks and opportunities.
The Board
Holds ultimate accountability for sustainability issues and, from January 2026, has
delegated specified responsibilities to the Sustainability Committee.
Met six times in 2025, discussing climate matters in all six meetings.
Executive Board
Manages strategic risks and opportunities, oversees our sustainability programme and
decarbonisation and nature positive plan delivery, and ensures resourcing. Met 10 times in
2025, discussing climate matters in seven meetings.
Audit and Risk Committee
Supports the Board in overseeing
all risks and reviews Principal risk 9
(Climate change and sustainability).
Met twice in 2025.
Safety, Health and
Environment (SHE) Committee
Oversees delivery of the safety,
decarbonisation and nature positive plans
and environmental performance.
Met eight times in 2025.
Remuneration Committee
Approves incentive plans for
Executive and Senior Managers,
including SHE and ESG (15%
environmental) weightings.
People Committee
Oversees the people matters related
to climate, such as skills, training and
benefits. Met six times in 2025.
Sustainability Committee
Supports the Board in providing additional
challenge and input in connection with
delivery of our sustainability programme.
Inaugural meeting 20 January 2026.
Operational Leadership
Manages risks and opportunities at
divisional level, with Managing Directors
leading market-based responses.
Working groups
Cross-functional working groups provide specialist
expertise and operational insight to support the delivery of
our climate strategy. They assess and manage
climate-related risks and opportunities, develop practical
solutions and support implementation across the business
within their respective focus areas.
Plant Climate
resilience
Materials Production
thinking
1 For full Board Governance see page 48.
25Strategic ReportOverview Governance Financial Statements 25
Sustainability continued
Strategy
In line with the priorities of the National Infrastructure Commission’s Second National Infrastructure Assessment, the UK
Government’s five missions and outlined 10-year Infrastructure Strategy, we are strategically well positioned in our four chosen
markets of Transport, Water, Energy and Defence. These markets are essential to ensuring infrastructure can meet our critical national
needs, delivering a more prosperous, resilient and decarbonised UK. See pages 8 and 9 for more information on Costain’s strategy
and business model.
We see considerable potential to shape and deliver lower-carbon
solutions for our customers and continue to invest in developing
the skills and capabilities needed to meet this challenge and
support the transition to net zero. We are further strengthening
the resilience of our strategy by embedding consideration
of physical climate risks into the planning and delivery of our
projects.
Our strong capability in climate adaption, particularly through
extensive work in the water sector, enables us to support clients
in designing and delivering infrastructure that is more resilient to
future climate conditions.
Impact on financial statements
We continue to monitor our contractual position associated with
the cost of lower-carbon materials and fuels, and we work closely
with customers and suppliers to manage these impacts. These
costs primarily relate to the current price premium for certain low-
carbon alternatives, such as hydrotreated vegetable oil (HVO),
which is not consistently recognised as an allowable cost across
all contracts.
At present, we do not consider these cost impacts to be material.
Robust risk management processes are embedded across the
business to identify, assess and manage climate-related risks,
supporting predictable project delivery and helping to mitigate
potential impacts on our financial performance and position.
Going concern and viability
While climate change is recognised as one of Costain’s principal
risks, the expected impact on operating costs over the periods
considered for going concern and viability assessments is not
regarded as material. Based on the outcomes of our scenario
analysis, we do not anticipate that climate change will have a
material effect on the Group’s short- to medium-term viability.
A decarbonised UK
We’re supporting the UK’s energy transition, accelerating low-
carbon technologies and creating infrastructure to support a
net zero future. Using low-carbon engineering, efficient use of
resources and circular economy principles, we deliver sustainable
infrastructure, with biodiversity net gain targets where relevant.
Costain was awarded a design services contract by Urenco for
Europe’s first advanced uranium fuels production facility. In doing
so, our civil nuclear and engineering team will help create a more
secure, resilient and decarbonised energy supply for the UK.
This facility will produce the specialist fuel needed to support the
development and deployment of the next generation of nuclear
reactors, with our expert engineers working collaboratively with
partners to make this future a reality.
A more resilient UK
We’re collaborating with customers, partners and our supply
chain to help the UK adapt and thrive in an uncertain world,
safeguarding communities against extreme weather, supporting
the UK’s energy independence and national security.
Costain is a leading partner along with Farrans, Jacobs, and
Mott MacDonald Bentley of the Strategic Pipeline Alliance (SPA),
delivering 580km of new pipeline for Anglian Water by 2030.
Together we are enabling the crucial transfer of water from
‘wetter’ parts of the Anglian region in North Lincolnshire to ‘drier’
parts, including Cambridgeshire, Suffolk, Norfolk and Essex.
Anglian Water’s interconnector programme will play a vital role
in safeguarding the environment by reducing reliance on water
abstraction from sensitive areas, including chalk streams, to
create sustainable water supply for generations. This forms part
of Anglian Water’s largest ever programme of work worth £11bn.
On pages 28 and 29 we have set out and described the climate-
related risks and opportunities to Costain over the short (0–3
years), medium (3–10 years) and long term (10 years+).
Resilience of Costain’s strategy to climate change
We have identified climate-related risks and opportunities facing
Costain, assessed against a change in temperature of 2°C or lower
scenario.
Our strategy continues to demonstrate resilience across these
risks, and we are well positioned to respond to growing market
demand as our customers seek to strengthen the climate
resilience of their infrastructure. In all scenarios analysed, the
opportunities presented outweigh the risks identified.
Discover more about Costain's Paris Agreement-aligned carbon targets -
see our decarbonisation plan/ www.costain.com/sustainability
26 Costain Group PLC | Annual Report and Accounts 2025
Scenario analysis
Understanding and navigating the complexities of climate change and their possible impacts on our business requires assessment of,
and preparation for, a range of possible futures. As such, we continually undertake scenario analysis to evaluate potential impacts of
climate-related risks, and to develop targeted adaption and mitigation strategies. Below are some of the scenarios analysed over the
past five years, ranging from physical risks to specific strategic measures that could be implemented in the transition to net zero.
Scenario Description Identified potential impacts Response
1. Chronic increase
in extreme heat
Assessment of the impacts of a
sustained increase in extreme
heat on workforce productivity
and material performance.
• Reduced productivity due to heat stress.
• Decreased durability and resilience of
materials and equipment.
Addressed through our risk
assessment (see risk 1, page 28).
2. Increased
precipitation and
storm frequency
Assessment of the impacts of
increased rainfall intensity and
frequency of storm events.
• Damage to site infrastructure, equipment
and materials.
• Programme delays resulting in financial
loss or customer affordability issues.
Addressed through our risk
assessment (see risk 1, page 28).
3. Introduction of
carbon taxation
Assessment of the potential
impacts of the introduction of
a carbon tax on construction
activities and materials, as is
of higher importance given the
imminent introduction of the
UK Carbon Border Adjustment
Mechanism (CBAM).
• Increased cost of carbon-intensive raw
materials (e.g. cement, concrete, steel).
Addressed through our risk
assessment (see risk 3, page 28).
Low-carbon concrete alternatives
considered in later concrete
analysis - see scenario 6 below.
4. Increased
customer
investment in
climate-resilient
infrastructure
Assessment of Costain’s
potential emissions intensity
profile based on different
revenue projections with
increased customer capital
spending on infrastructure
resilience.
• Higher revenue and construction activity
increase Costain’s total emissions.
• Potential delay to Costain’s pathway to
net zero.
Our new decarbonisation plan is
informed by and addresses this.
Please see the plan for more detail.
5. Transition to
HVO as a primary
fuel
Assessment of a full transition
from diesel and gas to
hydrotreated vegetable oil (HVO).
• Cost and carbon savings.
• Risk of increased deforestation
associated with HVO feedstock
cultivation.
• Significant emissions from burning phase
of HVO creation.
Continued investment in HVO as a
transitional fuel, alongside ongoing
assessment of alternative, more
sustainable fuel options.
6. Adoption of
low-carbon
concrete
Assessment of switching
from conventional cement-
based concrete to low-carbon
alternatives, considering the high
carbon intensity of cement.
• Potential increase in costs due to reliance
on specific low-carbon materials.
• Carbon emissions reductions.
Increased use of a diverse range
of low-carbon material options,
alongside promoting innovation to
develop and scale viable solutions.
Updated plans
In 2025, we developed our Decarbonisation Plan as an
update to our 2019 Climate Change Action Plan, setting
out the priorities and actions for the next five-year period
for Costain on its net zero pathway. The Sustainability
Committee approved the Decarbonisation Plan, along with
our first Nature Positive Plan, in January 2026.
We recognise there is a deep connection between nature
loss and climate change, and we are bringing together our
approaches to mitigation, adaptation, and nature-based
solutions to help build a nature-positive, decarbonised
future. These plans form an important part of our
sustainability programme and our transition planning.
We report progress against our sustainability programme in
our annual Sustainability Report.
Sustainability
Programme
Climate
Resilience
Plan
Decarbonisation
Plan
Nature
Positive Plan
27Strategic ReportOverview Governance Financial Statements
Risks
Risk Description Mitigation
1. Increased
frequency and
severity of
extreme weather
events
The latest climate data shows that the UK is
experiencing an unprecedented increase both
in the frequency and intensity of extreme
weather events, including flooding, storms,
droughts and heatwaves. These events can
disrupt construction schedules, cause damage to
assets and sites, and heighten health and safety
risks. Flooded or frozen ground can render sites
inaccessible or unsafe. Delays from such events,
as well as wind and rainfall, can increase project
costs and insurance premiums.
Costain is embedding climate risk measurement into project
controls, tracking and quantifying the lost time and cost of
extreme weather events. This insight is informing project-level risk
assessments and enabling earlier intervention to reduce disruption.
Lessons from past events are integrated into risk models to
improve planning and safety performance. Additionally, we are
trialling the use of digital forecasting tools to better anticipate
weather-related disruption and integrate this into project planning.
2. Supply chain
volatility to climate
and transition
impacts
Climate change and the global transition to a
low-carbon economy are increasing volatility
in supply chains for critical materials, products
and skilled labour. Extreme weather events can
disrupt logistics networks or manufacturing
capacity, while growing demand for low-carbon
materials such as green steel, cement substitutes,
and renewable fuels may create shortages or
price escalation. These pressures could lead to
project delays, increased procurement costs and
reduced ability to meet customer expectations
on programme and sustainability performance.
Costain is strengthening supply chain resilience by mapping
climate-related risks across key suppliers and materials, identifying
critical dependencies and alternative sourcing options. Our scenario
analysis on concrete use has enabled us to better understand
feasible material options and balance carbon reduction with
affordability. We collaborate closely with suppliers to enhance
transparency of carbon data and to develop low-carbon material
solutions. Long-term partnerships and framework agreements are
being prioritised to secure access to sustainable products and
minimise cost volatility. Our supply chain assurance processes now
include climate resilience and sustainability criteria, supported by
proactive engagement to build capability and resilience within our
partner network.
3. Increasing carbon
pricing and
regulatory
requirements
Strengthened carbon pricing mechanisms,
embodied carbon reporting obligations and
regulatory decarbonisation measures could
increase operational and supply chain costs,
with possible fines for non-compliance. The UK
Carbon Border Adjustment Mechanism (CBAM)
will begin phasing in cost impacts from January
2027, increasing prices for carbon-intensive
imported materials such as steel and cement.
Costain’s SBTi-validated carbon targets and net zero roadmap
ensure alignment with regulatory change. We are implementing
PAS 2080:2023 carbon management standards and collaborating
with customers and suppliers to reduce embodied carbon.
Our Environmental Data Tracker and Carbon Design Tool work
together to identify emission hotspots and mitigate exposure to
carbon taxation.
4. Long-term climate
impacts on working
conditions and
infrastructure
assets
Rising average temperatures, more frequent
heatwaves and potential sea level rises will affect
working conditions and infrastructure resilience.
Productivity may fall during extreme heat and
may require additional costs to maintain safe
working conditions. Higher temperatures and
changing moisture patterns may accelerate
deterioration of materials such as asphalt,
concrete and timber, increasing maintenance
costs and affecting asset longevity.
We collaborate with academic and industry partners to assess
climate resilience of materials and construction methods under
projected climate conditions.
As part of this, we have developed a Concrete Transition Pathway
to identify lower-carbon and more climate-resilient alternatives.
We conduct reviews of asset and material resilience under extreme
conditions and work with clients to adapt designs for long-term
durability.
5. Misalignment with
changing customer
procurement
preferences
Customer expectations around sustainability
are evolving rapidly, though some continue to
prioritise lowest-cost procurement, which may
disincentivise the adoption of low-carbon designs,
materials, and delivery approaches. Conversely,
others are increasingly selecting partners based
on demonstrable progress toward net zero and
sustainability credentials. A lack of agility or
alignment with either customer segment could
result in reduced competitiveness.
Costain is embedding PAS 2080:2023 carbon management
principles where possible across projects and supply chain to
clearly evidence both cost and carbon benefits. Our enhanced
carbon management system and digital carbon tracker quantify
whole-life cost efficiencies from low-carbon designs, enabling us
to demonstrate that sustainable solutions can also be the most
cost effective. We continue to collaborate closely with customers
to develop commercially viable, low-carbon solutions and advocate
for procurement approaches that balance cost, performance and
environmental impact
.
Climate risks and opportunities
The following table outlines the most material climate-related risks and opportunities identified in the short, medium and long term,
considering both physical and transitional impacts of climate change and the transition to a low-carbon economy. Costain’s processes
for identifying, assessing and managing climate-related risks are consistent with all Group risks, including the Climate change and
sustainability risk. For further details on this risk and how Costain approaches risk management, please see pages 34 to 39.
P A
P T C M
T
C
LT
P
Sustainability continued
T
M
New
ST
Short term (0-3 years)
P
Physical
PL
Policy & Legal
Updated Medium term (3-10 years)
T
Transition
No change
LT
Long term (10+ years)
C
Chronic
R
Reputational
Acute
M
Market
MT
P
PL
A
28 Costain Group PLC | Annual Report and Accounts 202528 Costain Group PLC | Annual Report and Accounts 2025
Opportunity Description Realisation
1. Expansion of
asset resilience
and adaptation
services
Rising climate risks will drive greater demand for
resilient and adaptive infrastructure solutions,
including flood defences, water resilience and
drainage systems. Costain can leverage its
expertise to help clients futureproof assets
against extreme weather and long-term climate
stressors.
Collaboration with water companies under AMP8 will enhance
our water treatment and sewage capabilities, and we will expand
our expertise and capabilities in road network resilience. Close
collaboration with clients and the supply chain supports high-quality
delivery and continuous improvement in asset resilience.
We participate in, and encourage, knowledge sharing with partners
to better our delivery of nature-based solutions and strengthen our
long-term market position.
2. Increased
resource
efficiency and
circular economy
benefits
Circular economy principles reduce greenhouse
gas emissions, waste and costs through
efficient resource use.
Renewable and low-carbon energy sources
on projects deliver whole-life cost efficiencies.
Greater energy and water efficiency will lower
operational expenditure, while aligning with
Costain’s net zero goals.
Costain’s approaches to production thinking and sustainable
procurement are driving material efficiency and waste reduction.
As part of this there is a focus on water withdrawal, and we are
currently performing better than our water reduction targets based
on our 2023 baseline.
As part of our waste reduction efforts, we enhanced our
internal waste reporting system to improve granularity and
accuracy, enabling better identification of waste hotspots and
opportunities for reduction and reuse. 2025 saw the full roll out
of our Environmental Construction Data Tracker, which has been
instrumental in managing resource use, enabling us to detect and
remedy inefficiencies across projects.
3. Growth in
low-carbon
and sustainable
infrastructure
solutions
The transition to net zero and increased
public and private investment in decarbonised
infrastructure create significant opportunities
for Costain to design, deliver and maintain
low-carbon assets across transport, water and
energy sectors. By becoming a driving force
in low-carbon infrastructure, we can gain a
competitive edge over peers.
Costain continues to build capability in sustainable engineering,
investing in skills and tools that deliver measurable carbon
reductions. Our Environmental Construction Data Tracker is helping
to reduce carbon and supporting insights for our clients on their
infrastructure.
Our work with clients supports the decarbonisation of new and
existing assets, positioning Costain for future large-scale green
infrastructure programmes.
4. Building
market-leading
sustainability
and nature-
based delivery
capabilities
The transition to a low-carbon and
climate-resilient economy requires new
technical, digital and sustainability skills across
sectors. Developing a workforce with advanced
sustainability and nature-based design skills is
essential for maintaining competitiveness and
attracting future talent.
Costain is embedding sustainability competencies into its training,
leadership and professional development programmes. We are
upskilling engineers, project managers and commercial teams in
carbon literacy and low-carbon engineering. Teams are being
trained to integrate biodiversity considerations and nature-positive
designs into infrastructure solutions. Through our new Geographical
Information System (GIS), teams are now able to geographically
evaluate nature risks and opportunities at an early stage, enabling
more targeted and effective nature-based interventions and
lowering cost for our customers.
Additionally, collaboration with academic institutions and industry
partners supports knowledge sharing and innovation in low-carbon
engineering. Our focus on a just workforce transition ensures
employees are supported as technologies and practices evolve,
building long-term organisational capability and resilience.
Risk Description Mitigation
6. Lack of availability
of low-carbon,
affordable plant
and equipment
As the industry moves towards low-carbon
operations, limited availability, affordability
and infrastructure for low-carbon plant and
vehicles may constrain project delivery and
increase hire costs. Regional disparities in
supply may increase capital expenditure. This
may also impact our ability to meet customer
expectations on emissions reduction.
Costain continues to trial and deploy low-carbon equipment,
working with suppliers to improve technology access and charging
infrastructure. Our current delivery model relies on hiring equipment
through strategic supplier partnerships, with the use of modern,
efficient and low-carbon plant embedded as a requirement within
our contracts. Training programmes ensure safe and efficient use
of new equipment. Design optioneering allows us to put forward
sustainable construction methodologies to customers.
T
R
P
M
MT
MT
MT
Oppor tunities
LT
29Strategic ReportOverview Governance Financial Statements
Metrics
The table below sets out the targets and associated metrics used to assess and manage Costain’s relevant climate-related risks and
opportunities. These metrics are focused towards carbon reduction and the management of water pollution events, as per the risks
and opportunities disclosed on pages 28 and 29. On page 31 we disclose our greenhouse gas emissions, and below we discuss our 2025
emissions reduction performance.
Targets Metrics 2025 2024
Deliver a >6% year-on-year
reduction in our absolute emissions
Greenhouse gas emissions Scopes 1, 2 and 3. This metric is associated with
our near-term Science-based Target. -41% -1%
100% of relevant contracts working
in accordance with PAS 2080
% of contracts compliant with 2023 low-carbon materials mandate. 89% 98%
% relevant designs and delivery contracts have a carbon baseline
and reduction plan.
100% 100%
50% reduction in the water pollution
incident rate by the end of 2027
(compared to 2024 baseline)
Water pollution environmental incident rate (no. of water pollution incidents
normalised by total hours worked).
0.01 0.06
Employees understand their role
in helping Costain to meet net zero
Positive responses to Costain’s annual employee engagement survey
question, - 'I am aware that environmental sustainability, including reducing
carbon emissions, protecting biodiversity, minimising waste, and using
resources efficiently is a priority for Costain'. 87% New
Positive responses to Costain’s annual employee engagement survey
question, ‘I am clear on the actions I can take in my role to support Costain’s
environmental sustainability goal'.
78% New
Our performance
The controls implemented to strengthen our ability to mitigate water pollution incidents coupled with a reduction in large earth-moving
activities has seen the water incident frequency rate dramatically fall by 87% compared to the 2024 baseline year.
We remain focused on raising the climate literacy of our people and are pleased to see that the majority of colleagues when asked in our
annual employee engagement survey understand Costain's sustainability priorities and their personal responsibilities in meeting these goals.
Delivering contracts as per our PAS 2080 management system is crucial not only in support of Costain's transition to net zero emissions,
but also ensuring our customers receive the solution that meets their needs. Our PAS 2080 compliance metric is an important management
indicator and is monitored at the monthly Executive Safety, Health and Environment Committee.
In 2025, total emissions fell by 50% from the 2021 base year and 41% year on year. We remain ahead of our net zero transition pathway
driven primarily by a sustained reduction in Scope 3 emissions. Despite this progress, our emissions profile remains heavily weighted
toward our value chain activities.
Costain's Scope 1 emissions fell 51% against the base year due to shifting construction activities and improved operational efficiency,
however, they rose slightly year on year as HVO usage dropped from 68% to 60% of bulk fuel consumption, driven by rising costs and
customer transitions. Following a 2025 review, we will prioritise 100% used cooking oil-derived HVO as a transition fuel. Diesel remains our
largest Scope 1 emission source; our 2026 focus is efficiency and phasing out all fossil and bio-fuels.
Scope 2: While currently a small proportion of overall emissions, these emissions rose against the base year. This reflects emissions
moving from Scope 1 to 2 as a result of the electrification of our car fleet (96% EV/PHEV) and the inclusion of more comprehensive project
electricity data for 2025.
Scope 3 emissions remain our most significant source, accounting for 97% of the total. Category 1 (Purchased Goods and Services) drives
the majority of these emissions, with concrete and steel remaining key contributors.
To refine our methodology, 2025 data now integrates supplier carbon reports, volumetric project data, and spend-based factors. This
improved data collection led to reported increases in 'upstream transportation', 'distribution', and 'waste'. We continue to leverage
Environmental Product Declarations (EPDs) for materials, capital goods, and leased assets. In 2026, we will launch specific material
pathways as part of our Decarbonisation Plan to target these high-impact areas.
Sustainability continued
30 Costain Group PLC | Annual Report and Accounts 2025
Greenhouse gas emissions
Our emissions data is calculated in line with the GHG Protocol. Costain applies an equity share approach to our GHG emissions boundary
and where we operate in a joint venture we account for Costain’s proportionate equity percentage of GHG emissions. Our data is third-
party accredited by Achilles per the Toitu Carbon Reduce scheme and ISO 14064-1 and 3. All of our Scope 1 and 2 emissions are incurred
in the UK.
In line with our GHG Protocol-aligned approach the following Scope 3 categories are not included in our reported footprint as they are
not relevant or have limited materiality to Costain’s operations: downstream transportation and distribution, processing of sold products,
use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises and investments.
Emissions intensity (Gross tCO
2
e divided by turnover)
Metric tonnes of CO
2
e/£m
2025 2024 2023 2022 2021
Scope 1 5.38 3.81 3.66 4.52 10.14
Scope 2 2.36 0.71 0.97 0.67 0.91
Scope 3 159.46 232.98* 216.72* 282.60* 296.84*
Total 167.21 237.51* 221.35* 287.79* 307.88*
Scope 1 (All direct emissions from the activities under our control)
Metric tonnes of CO
2
e/year
2025 2024 2023 2022 2021
Total 5,637 4,772 4,876 6,426 11,561
kWh 35,124,588 49,688,260 61,422,961 62,309,746 48,040,659
Scope 2 (Indirect emissions from our purchased and used electricity)
Energy/metric tonnes of CO
2
e/year
2025 2024 2023 2022 2021
Metric tonnes of CO
2
e/year 2,476 888 1,299 958 1,302
kWh 11,785,298 3,368,323 5,542,724 4,663,809 4,787,774
Location-based tCO
2
e 2,476 888 1,299 958 1,302
Market-based tCO
2
e 273 193 187 56 1,697
Scope 3 Metric tonnes of CO
2
e/year
Emission category 2025 2024* 2023* 2022* 2021*
Purchased goods and services 159,132 281,859 277,823 390,351 327,352
Capital goods 74 93 15 33 21
Fuel and energy-related activities 2,885 3,188 3,275 4,760 5,148
Upstream transportation and distribution 2,804 4,350 4,668 3,259 3,099
Waste generated in operations 100 566 325 952 1,156
Business travel 1,403 691 1,930 1,687 1,151
Employee commuting 432 620 579 565 503
Upstream leased assets 135 95 52 80 92
Total 166,965 291,463 288,666 401,687 338,522
Total emissions
Metric tonnes of CO
2
e/year
2025 2024* 2023* 2022* 2021*
Total 175,078 297,123 294,840 409,072 351,115
*Restatement of data
The restatement is a result of DEFRA conversion factors being updated in 2025. This means as Costain is currently using a spend-based
methodology to calculate some Scope 3 emissions, we are required to adjust older emission data for inflation to align with current-
year prices, ensuring accurate GHG conversion. We have restated GHG data from 2021, 2022, 2023 and 2024 in accordance with our
accounting and reporting principles to ensure relevance, completeness, transparency and accuracy.
We provide further detail on our emissions and energy consumption in our sustainability databook /
www.costain.com/sustainability/reports-and-downloads/
31Strategic ReportOverview Governance Financial Statements
Chief Financial Officer’s Review
Adjusting items
Adjusting items were significantly lower in FY 25, amounting to
£2.3m (FY 24: £12.0m). We incurred £0.7m (FY 24: £5.4m) of residual
Transformation programme costs and £2.6m (FY 24: £0.1m credit)
of restructuring costs, partially offset by a £1.0m provision release
(FY24: £6.7m cost) relating to historic fire safety compliance claims.
Net financial income
Net finance income amounted to £3.8m (FY 24: £5.4m). The
interest payable on loans and other similar charges was £1.8m
(FY 24: £1.4m), reflecting higher bank charges on the accelerated
amortisation of charges relating to our prior refinancing, and there
was lower interest income on the lower bank deposits of £5.0m (FY
24: £6.7m). In addition, the net finance income includes the interest
income on the net assets of the pension scheme of £3.0m (FY 24:
£2.6m) and the interest expense on lease liabilities of £2.4m (FY 24:
£2.5m) under IFRS 16.
Tax
The Group had a tax charge of £10.9m (FY 24: £5.9m) giving an
effective tax rate of 22.6% (FY 24: 16.2%). The adjusted effective
tax rate was 22.8% (FY 24: 18.3%). This is lower than the statutory
tax rate due to permanent differences, including tax relief on the
exercise of share-based payments. We expect the effective tax rate
in FY 26 to remain marginally below the statutory tax rate of 25%.
Cash flow
The Group generated adjusted free cash flow of £63.1m in FY
25 (FY 24: £27.1m), higher than the previous year largely due to
the timing of year-end working capital and lower tax and capital
expenditure payments.
The Group had a positive net cash balance, excluding cash with
restrictions, of £189.3m as of 31 December 2025 (FY 24: £158.5m;
H1 25: £144.9m) comprising Costain cash balances of £121.6m (FY
24: £95.8m; H1 25: £85.0m), cash held by joint operations of £67.7m
(FY 24: £62.7m; H1 25: £59.9m) and borrowings of £nil (FY 24: £nil;
Helen Willis
Chief Financial
Officer
H1 25: £nil). During FY 25, the Group’s average month-end net cash
balance was £152.6m (FY 24: £169.8m; H1 25: £149.4m) and the
Group’s average week-end net cash balance was £149.2m (FY 24:
£164.3m; H1 25: £152.9m) with both average metrics impacted by
the timing of working capital unwinds that did not reverse until the
latter part of the year. Utilisation of the total bonding facilities as of
31 December 2025 was £72.4m (FY 24: £65.3m; H1 25: £71.2m).
Pensions
Cash contributions made to the Group’s defined benefit pension
scheme (Scheme) during FY 25 amounted to £nil (FY 24: £2.0m).
This reflected the annual actuarial assessments of the Scheme
funding position carried out as at 31 March 2024 and as at 31
March 2025, both of which concluded that the funding level (on a
Technical Provisions basis) was more than 101%, in turn triggering a
pause in cash contributions from 1 July 2024 to 30 June 2025, and
then again from 1 July 2025 to 30 June 2026.
The charge to operating profit in respect of the administration
cost of the Scheme in FY 25 was £nil (FY 24: £0.1m). As at 31
December 2025, the Scheme was in surplus in accordance with IAS
19 at £60.0m (FY 24: £54.9m surplus; H1 25: £56.1m surplus). The
movement in the IAS 19 valuation, being a slight increase in surplus
from 31 December 2024 to 31 December 2025, was principally due
to a change in inflation assumptions, which resulted in a decrease
in benefit obligations.
On 26 January 2026, we announced that an agreement had
been reached with the Trustee of the Scheme on the 31 March
2025 triennial actuarial funding valuation and ongoing Scheme
contributions. Following this, the dividend parity arrangement that
previously existed has been removed, there is no requirement
going forward for an annual assessment of the Scheme funding
position and there will be no further cash contributions made
by the Company into the Scheme under the new schedule of
contributions, which is in place until January 2031. We will continue
to review options for restructuring the Scheme with the Trustee.
Costain Group PLC
| Annual Report and Accounts 2024
3232 Costain Group PLC | Annual Report and Accounts 2025
1 See notes 2 to 4 of the financial statements for adjusted metric details and definitions, and reconciliation to reported metrics.
2 Excludes 'cash and cash equivalents - with restrictions' of £26.0m (FY 24: £38.4m). See note 17 of the financial statements.
Revenue
£1, 045. 7m
Operating profit
£ 44.8m
Operating profit margin
4.3%
Transportation Natural Resources Group
2025 2024 Change 2025 2024 Change 2025 2024 Change
Reported revenue £m 605.3
845.9 -28.4%
440.4
405.3 8.7%
1,045.7
1,251.1 -16.4%
Operating profit £m
Adjusted
1
24.9
29.9 -16.7%
35.0
23.8 47.1%
47.1
43.1 9.3%
Adjusting items
1
– –– – ––(2.3) (12.0) -80.8%
Reported 24.9 29.9 -16.7% 35.0 23.8 47.1% 44.8 31.1 44.1%
Adjusted free cash flow reconciliation
£m 2025 2024
Cash flow from operations 50.7 41.7
Add back adjusting items 3.5 8.6
Add back pension deficit contributions - 2.0
Add back / (less) cash flows on cash and cash equivalents – with restrictions 12.4 (14.0)
Less taxation (0.7) (2.2)
Less capital expenditure (2.8) (9.0)
Free cash flow 63.1 27.1
Net cash reconciliation
£m 2025 2024
Cash and cash equivalents at the beginning of the period
2
158.5 164.4
Net cash flow 30.8 (5.9)
Cash and cash equivalents at the end of the period
2
189.3 158.5
Net cash 189.3 158.5
Helen Willis
Chief Financial Officer
9 March 2026
2023 £1,332.0m
2024 £1,251.1m
2025 £1,045.7m
2023 £26.8m
2024 £31.1m
2025 £44.8m
2023 2.0%
2024 2.5%
2025 4.3%
33Strategic ReportOverview Governance Financial Statements
Risk Management
Our risk management process
The timely and thorough evaluation of risk is central to our business decision making, and our approach is designed to ensure risks of
all categories are identified, fully understood, and actively managed to protect our business, our people and the value we deliver for our
customers.
Our process applies at all levels, from individual project risks to our Group-level principal risks. This approach ensures that risks are
considered throughout the lifecycle and that learning from our operational activities supports continuous improvement.
Initiate
Designing and setting up the arrangements required – in accordance with our risk framework –
to enable effective management of risk for a specific activity, for example a new contract.
Close
Capturing key risk management lessons at the end of an activity, ensuring
that any remaining risks have been addressed and closed or transferred.
Identify
Identifying and clearly defining the potential threats
and opportunities that could impact the activity and/or
our ability to meet objectives.
Assess
Using judgement, experience, industry norms
and lessons learned to assess the likelihood and
potential consequences of the identified risks,
considering any existing control measures.
Plan
Developing and planning response actions with specific
owners and timescales, for example to avoid or reduce
a threat or to help enhance or realise an opportunity.
Implement
Carrying out response actions, monitoring risk
trends and updating the plan and risk assessment.
Managing risk through the contract lifecycle
Risk management is central to the work we deliver for our customers, and in particular our construction project activities, where our
teams manage a broad range of risks including those related to design maturity, approvals and consents, existing asset condition and the
performance of third parties. Our lifecycle governance and risk management arrangements aim to ensure that we identify and explore
potential risks early, make bid decisions based on our risk appetite, set our contracts up for success, and deliver our commitments to our
customers.
Work winning
Our work winning governance includes
early screening to identify key areas
of risk, and to ensure that we pursue
opportunities that align with our risk
appetite. This approach also ensures that
higher-risk activities and contract types
receive enhanced assurance so that risks
are properly understood, and mitigation
strategies are robust. It also helps to
shape customer strategy. Risk analysis is
used to ensure our pricing and delivery
plans recognise the risks we’re taking
on so that we have confidence in the
commitments we make to customers.
Delivery
Management of risk is a central part
of how we deliver our projects, with
ongoing monitoring of risk response
and changes in risk profile, integrated
with other project controls activities.
Risk-based assurance of our contracts
is performed by our Internal Audit
and second line of defence functional
teams, providing an independent view
of risk status and ensuring learning
and good practice is shared across
our sectors.
Close
When a project is closed,
our teams ensure that
measures are in place
to manage any residual
risks, and lessons and
performance data are
captured for use in
planning future projects.
3434 Costain Group PLC | Annual Report and Accounts 2025
Risk appetite and attitude
The Group’s risk appetite is aligned with our strategy, ensuring we continue to deliver predictable performance and pursue growth in key
markets. The Board’s attitude to key categories of risk is set out in the table below. This is underpinned by clearly defined red lines and
risk factors, which are used to evaluate risk through our contract lifecycle governance, ensuring that decisions are made in accordance
with our risk appetite.
Risk category Appetite Attitude statement
Safety, health
and environment
Zero We have no tolerance for harm to our people or partners, and will continually seek to reduce
these risks and avoid any detrimental impact on the environment.
Markets, customers
and partners
Open We are willing to consider a range of potential markets to achieve success in line with our
strategy. We work with customers with long-term investment plans with whom we can build
strategic relationships and secure repeat orders. We will partner with organisations that
supplement our capability with new skills and share our values.
Contract Cautious While our contracts contain significant risks, we ensure these risks are well understood,
provisioned for and manageable. We will only accept contracts where there is high
confidence in achieving the target margin.
Technical Cautious We are prepared to accept performance and integration risk provided additional technical
assurance is implemented to ensure this is effectively managed. Our projects are delivered in
accordance with nationally recognised codes and technical standards.
Investment Cautious We will invest in developing solutions or building capability where there is a clear addressable
market demand aligned with our business plan.
Information security Minimal We will protect our systems, our data and our customers’ data to ensure we minimise the risk
of disruption to operations and prevent uncontrolled access to information.
Governance
The Board is responsible for defining risk appetite and determining the nature and extent of the risks the Group is willing to take to
achieve its long-term strategic objectives. On behalf of the Board, the Audit and Risk Committee reviews the effectiveness of the Group’s
risk management and internal control systems every year. The process for doing this is set out in the Audit and Risk Committee Report on
pages 54 to 57.
To undertake a robust assessment of the risks that could threaten our business objectives, performance, sustainability, solvency or the
liquidity, the Board undertakes reviews of our principal risks and mitigation plans during the year to ensure they are well understood
and actively managed to reduce the potential impact. The Board oversees risk deep dives and receives presentations on these from the
Executive Board risk owner.
35Strategic ReportOverview Governance Financial Statements
Risk Management continued
Principal risks
All principal risks are integrated with our strategic priorities. A formal biannual review of risks by the Board is aligned to half-year
and year-end reporting. Each principal risk is owned by a member of the Executive Board, and discussions are held with risk owners
throughout the year to ensure each risk remains up to date and that control effectiveness and progress on mitigation actions are
reviewed. The detailed assessment for each risk reflects changes to contributing factors including those in the external risk landscape.
Routine review of the project set-up, mobilisation and delivery principal risk included an increased focus on design and quality
management, ensuring controls are operating effectively in reducing design risk, preventing defects and minimising rework in our
construction projects. Following the successful completion of the Transformation programme in 2024, the Transformation principal risk
was closed.
The table below sets out the principal risks faced by the Group, the link to our strategic priorities, any changes in the risk trend during
2025, along with relevant controls and mitigations.
Risk Description and impact Key controls and mitigations Strategic link
Safety,
health and
environment
We operate in naturally complex and
hazardous environments. Failure to manage
the inherent risk and hazards could result in
illness, injury or loss of life. Failure to manage
this risk could also affect our reputation
and result in loss of business and financial
penalties.
While some of our operational activities
involve significant hazards, we continue to
strive to reduce these risks and prevent any
potential for harm to our people or to third
parties.
Risk trend: Neutral
Early identification of potential environmental
risks during work winning is helping to ensure
we incorporate required controls into delivery
plans. Growth in key sectors will require the
consistent application of our existing, robust
health and safety controls with new teams
and supply chain partners.
• Safety, health and environment (SHE) policy, procedures
and guidance combined with monitoring and assurance.
• Progressive design review and approval to eliminate or
control health and safety risks.
• Technical control and approvals for construction activities
including temporary works and lifting operations.
• The Costain behavioural safety programme.
• Mandated accident and near miss reporting and embedding
of lessons learned.
• SHE assurance review process aligned with the learning
organisation model used throughout delivery and during
bid development to ensure key risks are identified and
appropriate mitigation measures are in place.
• Early consideration of environmental risks during work
winning, updated during mobilisation and monitored via
monthly operational review.
• Reporting of environmental incidents and near misses to
ensure lessons learned.
Securing
work and
responding
to changes
in customer
spending
plans
Our future growth and profitability is
dependent on our ability to secure new
work in our competitive marketplace. To
be successful, we need to maintain strong
customer relationships and broaden our
service offering by delivering innovative
solutions across complex delivery and
consulting activities. Unforeseen changes to
our core customers’ investment priorities and
spending plans could have a direct impact on
both live contracts and our future pipeline.
Risk trend: Neutral
Continued success in securing new work
during 2025 and further progress in
diversifying our order book have helped to
increase our resilience to external changes
and geopolitical risks.
• Annual Business Planning Process and Quarterly Business
Review of progress against plan, budget and objectives, and
customer mix.
• Strategic Investment Panels, Work Winning Process and
Gates.
• Continual review and update of customer pursuit/account
plans based upon latest market intelligence.
• As part of the annual strategy review process, changes in
markets and customer landscape are analysed, particularly
in growth and fast-changing markets. Strategy leads are
embedded within both divisions and the Group to drive this
analysis and ensure continuous horizon scanning, managing
changes to strategy and business plan, along with
emergent risks and opportunities to Costain and any threats
(eg competition or customer organisation change).
• Business development teams at sector and key account
level maintain good customer and stakeholder relationships
at all levels.
• Customer zipper (stakeholder relationship map) plans
in place to shape relationships with government, local
authorities and trade bodies from Board downwards.
• Strengthening our customer mix and exploring potential
new market areas to increase resilience to changes in
specific areas.
Link to strategic priority
To be an admired,
growing company
Growth in strong
markets
Predictable best -in-
class delivery
A resilient
customer mix
A meaningful
consultancy service
36 Costain Group PLC | Annual Report and Accounts 2025
Risk Description and impact Key controls and mitigations Strategic link
Managing
our contracts
and economic
factors
The contractual environment is becoming
more complex with significant pricing
competition, while customers seek to transfer
more risk to contracting parties. Onerous
contract terms and conditions can result
in exposure to potential financial losses,
legal penalties and reputational damage. In
addition, changes in the cost and availability
of key materials, plant and fuels, along with
other factors including exchange rates, trade
arrangements and regulations can impact our
delivery and financial performance.
Risk trend: Neutral
Measures to identify and control potential
contract risks during work winning, and to
strengthen protection in our contracts for
external factors such as inflation continue to
operate effectively in managing this risk.
• Commercial review process, which examines in depth the
performance of all contracts to assess progress in achieving
our strategic objectives.
• Early risk profiling of opportunities to ensure key contract
risks are identified and bid decisions are aligned with risk
appetite.
• Detailed contract reviews form part of work winning
governance to ensure robust management of contract risks.
• Technical, design and estimate reviews as part of work
winning process.
• Assessment of sensitivity to key economic factors
including inflation and materials availability during proposal
development, ensuring that appropriate measures are
incorporated into contracts to protect the business from
future volatility.
• Monthly financial contract and account reviews.
• Ongoing monitoring of supplier performance and invoicing
cost trends.
• Centralised procurement of materials and goods sourced
from outside the UK to ensure an optimised approach to
managing exchange rate movements and external effects
on materials supply.
Project
set-up,
mobilisation
and delivery
Working with our customers, we manage
some of the most complex and challenging
infrastructure projects in the UK, and this
relies on rigorous design, planning, risk
management and execution in delivery. Failure
to effectively plan, mobilise and manage
these complex projects can result in delays,
impacting our customers and our market
reputation for delivery excellence.
Risk trend: Neutral
Design and product quality aspects of this
risk were reviewed during 2025, considering
existing controls and any improvement
measures necessary to strengthen these
further.
• Robust planning, estimating and risk identification and
analysis during proposal development to form a stable,
deliverable baseline for delivery.
• Compliance with all aspects of the technical and design
gate approvals.
• Mobilisation process, ensuring resources, processes and
systems are in place in time to commence delivery.
• Formal contract closure process to ensure that all aspects
of work are complete.
• Contract management gates, change control processes and
contract performance reviews.
• Design quality and management plan with enhanced
technical assurance of outsourced design.
• Progressive assurance and inspection regime for supplied
products and offsite production.
• Control of changes to, or substitution of, supplied items to
protect design intent and maintain quality.
Procurement
and supply
chain
performance
A significant proportion of our work is delivered
through our supply chain, and supplier
selection and performance are, therefore,
critical to our ability to fulfil our commitments to
our customers. Issues with supplier resourcing,
product quality or performance can adversely
affect project delivery, contract performance
and our reputation.
Risk trend: Neutral
Standards, processes and governance for
supplier selection, performance monitoring
and onboarding have been strengthened, with
benefits expected to be realised from 2025
onwards.
• Procurement process for evaluating potential options and
selecting the appropriate supplier.
• Enhanced standards for monitoring supply chain
performance.
• Continued drive on prompt payment of supplier invoices.
• Revised ‘How to Buy’ process covering end-to-end lifecycle
of supply chain activities.
• Revised Supplier Code of Conduct.
• Implementation of improved procurement schedule and
demand planning.
• Early development of supply chain strategy within work
winning process.
37Strategic ReportOverview Governance Financial Statements
Risk Management continued
Risk Description and impact Key controls and mitigations Strategic link
People:
attracting,
developing,
and retaining
talent
The successful implementation of our strategy
is dependent on our ability to attract and
retain the skills and experience required to
deliver our portfolio of work, lead specialist
teams and continue to grow our market
share. In an increasingly tight skills market,
we have continued to focus on improving
our understanding of future skills needs
and on improving the Costain offer. We
also recognise that developing skills and
experience is essential in delivering our
current and future needs, building resilience
and providing development opportunities for
our people. Failure to invest in these matters
would hamper our growth, reduce employee
engagement and increase attrition, impacting
costs and performance.
Risk trend: Increasing
Planned growth across key sectors is
expected to increase the significance of
this risk, given the backdrop of market
competition for talent, with local and national
constraints on available skills and resources.
We increased the size of our graduate intake
in 2025 and are investing in upskilling and
targeted development programmes alongside
recruitment to meet demand. As a positive
reflection of the measures in place for this
risk, 2025 saw a further increase in employee
engagement score and retention.
• Workforce planning with demand forecasting for key skills
aligned with our business plan and work winning pipeline,
underpinning an integrated plan for growth aligned with key
skills and regions.
• New people system implemented to improve efficiency and
effectiveness of core people processes with data insights
used to improve attraction, recruitment and on-boarding
experience.
• Career path framework, providing greater visibility of skill
requirements and career development paths across the
organisation to underpin attraction and retention.
• Significant investment in technical, core and leadership
skills, through a comprehensive training curriculum, study
assistance support, professional development pathways
and targeted development programmes.
• Regular review and external benchmarking of our offer,
ensuring we keep pace with market requirements.
• Targeted enhancement to talent management and
development in key functions to increase mobility and
visibility of opportunities.
• Strengthened employee communication and engagement
channels and active networks providing two-way
communication, feedback and connection.
Financial
resilience:
maintaining
a strong
balance
sheet, access
to banking
facilities and
managing
our legacy
pension
scheme
A strong balance sheet is a prerequisite for
many of the opportunities we pursue and the
contracts we deliver for our customers. Failure
to manage the legacy defined benefit pension
scheme (so that the liabilities are within a
range appropriate to our capital base) could
also adversely impact our balance sheet.
Risk trend: Neutral
No change in this risk during 2025.
• Monthly business review to monitor status of material
contracts and ensure performance is aligned with
expectations.
• Quarterly profit and cash forecast produced for the current
and following fiscal year including monitoring of covenant
compliance and cash headroom and liquidity.
• Ensuring alignment of customer and supply contract
payment terms to support effective control of working
capital.
• Development of three-year investment for strategy
implementation pillars (digital tools, capabilities) to support
business plan.
• Regular monitoring, in conjunction with the trustee, of asset
performance, pensions regulations, Company covenants,
scheme funding and liability management.
• Professional sole pension trustee appointed to manage
legacy pension scheme, providing greater clarity on
investments and market conditions.
Link to strategic priority
To be an admired,
growing company
Growth in strong
markets
Predictable best-
in-class delivery
A resilient
customer mix
A meaningful
consultancy service
38 Costain Group PLC | Annual Report and Accounts 2025
Risk Description and impact Key controls and mitigations Strategic link
Information
security:
systems
disruption
and data
protection
Our work is enabled by safe, secure and
resilient operating systems. Disruption to
these systems, for example as a result of an
outage or a targeted cyber-attack, would
impact our ability to continue our normal
operational activities efficiently. Unauthorised
disclosure of Costain, customer or third-party
data could result in financial penalties, loss
of competitive advantage or reputational
damage.
Risk trend: Neutral
While this risk was reported as increasing
during 2024, it has remained at a heightened
level throughout 2025, with multiple high-
profile cyber-attacks on the UK and global
organisations across the UK.
• Maintaining Cyber Essentials Plus (CE+), ISO 22301 (Security
and Resilience) and ISO27001 (Information Security)
accreditation.
• Threat monitoring, vulnerability management and auto-
remediation.
• Costain information security strategy, integrating
information systems, personnel and physical aspects to
prevent, detect and respond to information security threats
and data loss.
• Continual focus on improving cyber resilience in technology
and people, improving our security education, training and
awareness.
• Ensuring all employees comply with mobile device
management platform requirements.
• Early engagement and awareness of Costain security and
information systems requirements during work winning.
• Conduct data discovery and scanning audit across the
business.
• Review and update, as necessary, our system configuration
assessments and Automatic Information Protection
protocols.
Climate
change and
sustainability
Environmental and social responsibility is one
of our core values. Failure to deliver on our
sustainability targets could impair operational
performance and damage our reputation in
the eyes of our employees, customers and
other stakeholders. Our operational activities
and contract performance could also be
impacted by future changes in climate and an
increase in the frequency of major weather
events in the UK.
Risk trend: Neutral
We continue to monitor our climate-related
risks and report in more detail through our
Task Force for Climate-related Financial
Disclosures (see pages 24 to 31).
In response to changing political and
economic factors, we updated our
decarbonisation plan to support our transition
to net zero emissions and produced our first
Nature Positive Plan.
• Annual strategy and business planning cycle – functional
business plans reviewed for alignment with our
sustainability programme.
• Greenhouse gas (GHG) emissions baselines set for in-flight
operations.
• Embedding sustainability assurance into work winning
governance and proposal development.
• Assessment of the potential contractual impact of
weather event delays, ensuring adequate provision and/or
protection is incorporated into agreements.
• Assuring actions to plan for extreme weather are
incorporated into project planning and delivered during
mobilisation.
• Consideration of climate change impact on materials, assets
and product life as part of technical design process and
gate approvals.
• Climate risk and sustainability awareness training for all
senior managers.
• Improving our emissions footprint data through our
proprietary insight, including our new digital tool, and
communicating performance through reporting dashboards.
39Strategic ReportOverview Governance Financial Statements
Assessing the Group’s prospects
The Group’s prospects are assessed through the annual strategic
planning process, which involves the creation of four-year
divisional business plans, which are reviewed in detail by the
Executive Board.
To create these plans, each division assesses external factors
– market spend and emerging trends, regulatory environment,
legislative spend, strategic national needs and our customers’
business plans, and internal factors – including capability, skills,
technology and thought leadership.
This results in a set of objectives and a clear implementation
plan, considering known and emerging risks and opportunities
over a broader horizon. This includes a five-year financial plan,
with strategic objectives including targets for key accounts and
strategic campaigns, resourcing and skills planning as well as
research and development activity to support our customers to
address complex infrastructure challenges.
The Board scrutinises and monitors the strategic and financial plans.
Assessing the Group’s viability
While the Group has a five-year strategic planning horizon, our
order book visibility is stronger over the medium-term period
and our implementation workstreams are focused on the
more immediate term. Therefore, the Directors believe that an
appropriate period to consider the Group’s viability is over three
years to December 2028.
The Directors have assumed that the current revolving credit
facility remains in place with the same covenant requirements
through to September 2029, with an option to extend by a further
year, and that the Group would either renew the facility thereafter
or have sufficient time to agree an alternative source of finance,
on terms that are broadly consistent with the current facility for
the remainder of the three- year period assessed.
The assessment of viability has been made considering the
Group’s principal risks (as outlined on pages 36 to 39). The
Directors consider the likelihood of all these risks crystallising
together to be remote and have, therefore, tested scenarios
where a number of these risks materialise together in a plausible
but severe and prolonged combination.
These downside scenarios reflect a combination of circumstances,
including the potential impact of a significant decline in activity
resulting from an inability to secure new work within the estimated
work to be obtained and/or deliver it at improved planned
margins; the impact of a major safety incident or data breach and
associated fines; the impact of a working capital decline; the loss
of key management and inability to recruit the right capabilities;
and a change in UK Government policy impacting investment and
procurement programmes. Refer to note 2 of the consolidated
financial statements on page 113 for more information.
Viability Statement and Going Concern Assessment
The main focus has been the impact of these downside scenarios
on the Group’s ability to comply with the leverage, interest and
liquidity covenants as set out within its banking facilities, not the
absolute value of net debt since, as evidenced by a reverse stress
testing of each of the covenants, the Group maintains a significant
cash headroom to absorb any further unforeseen losses.
In the event that the risks modelled in the severe but plausible
downside scenarios were to materialise together, the Group would
be able to continue operating within its covenants and the Group’s
credit facilities would not be exhausted.
Viability statement
In accordance with Corporate Governance Code 2024 Provision
31, the Directors have assessed the prospects of the Group over a
longer period than the 12 months required by the ‘Going Concern’
provisions. Based on the results of this analysis, the Board
confirms that it has a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities as they fall
due over the three-year period to 31 December 2028.
Going concern
The Group’s going concern statement is detailed in note 2 of the
consolidated financial statements on page 113.
Strategic Report
Our 2025 Overview and Strategic Report on pages 1 to 41 have
been reviewed and approved by the Board of Directors and
signed on its behalf by:
Nicole Geoghegan
Company Secretary
9 March 2026
40 Costain Group PLC | Annual Report and Accounts 2025
Non-financial and sustainability information statement
Our reporting is compliant with the non-financial reporting requirements contained in sections 414CA and 414CB of the Companies Act
2006. The below table, and the information it refers to, is intended to help stakeholders understand our position on key non-financial
matters. This is in addition to the reporting we already do under the Carbon Disclosure Project (CDP) and the Global Reporting Initiative.
1
Board diversity and inclusion
This policy sets out the Chair and Board of
Directors’ commitment to maintaining a diverse
and inclusive Board, leading by example and
setting the expectation that the Group operates
inclusively and continues to invest in diversity.
The owner of this policy is the Chair.
2
Business continuity management
The principles, which are to be adopted to ensure
business continuity across the Group, are set
out in this policy. The Executive Board sponsor
for this policy is the Chief Financial Officer.
3
Collaborative working
This policy sets out the approach that Costain
management shall take to ensure a collaborative
working environment is maintained and
relationships reflect the requirements of ISO
44001:2017 Collaborative Business Relationships.
The Executive Board sponsor for this policy
is the Group Commercial Director.
4
Drugs and alcohol
This policy is a declaration of the Board’s
intent to provide a safe and healthy working
environment, free from inappropriate use of
alcohol and drugs in all Costain undertakings.
The Executive Board sponsor for this policy is the
Chief Executive Officer.
5
Environmental
This policy sets out our approach to
environmental management, going beyond
minimising harm to the environment and sets out
the proactive requirements of how our people
must work to meet our ambition to be net zero
carbon by 2045. The Executive Board sponsor
for this policy is the Chief Executive Officer.
6
Ethical business conduct
Bribery prevention, fair and open competition,
insider dealing prevention, fraud prevention,
receipt of gifts and hospitality, and
whistleblowing are all covered by the Costain
ethical business conduct policy. The Executive
Board sponsor for this policy is the General
Counsel and Company Secretary.
7
Health and safety
This policy protects all our stakeholders,
including customers, colleagues and suppliers,
going beyond our statutory duties and
responsibilities. The Executive Board sponsor
for this policy is the Chief Executive Officer.
8
Modern slavery and human trafficking
This policy specifies the mandatory conditions
of employment and contractual conditions
for our suppliers in respect of human rights.
The Executive Board sponsor for this policy
is the Chief People and Sustainability Officer.
9
People
The Costain people policy encompasses
recruitment, development, reward, diversity
and inclusion, health and wellbeing, compliance
with labour/employment and data protection
laws and regulations, wherever we work.
The Executive Board sponsor for this policy
is the Chief People and Sustainability Officer.
10
Social value
This policy sets out the Board’s expectation
for how the Company, its employees, partners
and suppliers undertake social value in alignment
with Procurement Policy Note 002 and the
UK Government's Social Value Model themes.
This policy encompasses Costain’s approach
to social value and transparency in our reporting.
The Executive Board sponsor for this policy
is the Chief People and Sustainability Officer.
11
Sustainable procurement and supply
chain
The Costain sustainable procurement and
supply chain policy stipulates the conditions
of all procurement activity, aligning outcomes
to our sustainability goals and business strategy.
The Executive Board sponsor for this policy
is the Chief Financial Officer.
Policy
Environmental, Social
and Governance (ESG)
and risk management
reporting requirements,
and additional information
Environmental
5
10
11
Sustainability programme / pages 22 to 23
Task Force on Climate-related Financial
Disclosures
/ pages 24 to 31
Climate change action plan /
www.costain.com/sustainability/
environmental/
Employees
1
3
4
6
7
8
9
10
Sustainability programme / pages 22 to 23
Board composition and diversity /
pages 51, 60 and 61
Gender and ethnicity pay gap report
2025 / www.costain.com/sustainability/
reports-and-downloads/
Human rights
6
7
8
9
10
11
Supplier code of conduct /
www.costain.com/suppliers
Modern slavery statement /
www.costain.com/modern-slavery-
transparency-statement
Social matters
4
8
9
10
11
Sustainability programme / pages 22 to 23
Sustainability Report 2025 /
www.costain.com/modern-slavery-
transparency-statement
Anti-corruption and anti-bribery
6
8
10
11
Supplier code of conduct /
www.costain.com/suppliers
Policy embedding,
due diligence and outcomes
Risk management / pages 34 to 39
Description of principal risk
and impacts on the business
Risk management / pages 34 to 39
Description of business model
Business model / pages 8 to 9
Non-financial KPIs
KPIs / page 17
41Strategic ReportOverview Governance Financial Statements
Board of Directors
Dynamic and effective leadership
Appointed
Skills and competencies
External appointments
Tony Quinlan
ACA
Senior Independent Director
Kate Rock
Non-Executive Chair
Alex Vaughan
FRICS, FICE
Chief Executive Officer
Helen Willis
ACA
Chief Financial Officer
Kate was appointed to the Board
in November 2022 and became
Chair of the Board and Chair of
the Nomination Committee in
December 2022.
Alex was appointed to the
Board as CEO in May 2019.
Helen was appointed to the Board
as CFO in November 2020.
Tony was appointed to the Board
in February 2021, became Chair of
the Audit and Risk Committee in
May 2021 and Senior Independent
Director in January 2022.
Kate is an experienced
Non-Executive Director with
a background in corporate
communications and strategy, and
brings a strong understanding of
the construction and contracting
sector, the application of
innovation and technology to drive
productivity enhancements, and of
government.
Kate Rock is senior independent
director at Keller Group plc
and formally non-executive
director and chair of the
remuneration committee of the
former global FTSE 250 high
technology company, Imagination
Technologies plc. She was, until
January 2023, a Board member of
the world’s first Centre for Data
Ethics and Innovation and sat on
the House of Lords Science and
Technology Select Committee.
She recently Chaired the House
of Lords Select Committee on
Autism.
Alex has worked in the
infrastructure industry for
more than 35 years and has
extensive experience across
programme delivery, private
finance, operations and business
leadership.
Alex joined Costain in 1992
and has been a member of the
Executive Board since 2006.
Before becoming CEO, Alex played
a significant role in Costain’s
transformation into a leading
infrastructure solutions business
through his leadership of the
development and growth of the
Group’s consultancy services.
Alex is a qualified chartered
quantity surveyor, has worked
on infrastructure projects in the
UK and internationally, and held
various corporate roles across
HR, strategy, M&A and corporate
development with a focus on
delivering significant growth in
profit and margin. In 2009, he
completed the Harvard Business
School Advanced Management
Program.
Helen has a strong financial
background underpinned by
her profession as a chartered
accountant. She is an experienced
public company chief financial
officer with a high level of
understanding of investor relations
and change programmes, including
in organisations undergoing
periods of strategic change.
Helen has also driven finance
transformation programmes to
significantly improve processes,
systems and culture. She has
worked in multiple sectors and
is highly commercial, able to
balance both short and long-term
goals, develop strategic options
and contribute broadly to the
business. Prior to joining Costain,
Helen held roles as chief financial
officer of De La Rue and Premier
Farnell. She has also held senior
finance roles at Pelican Rouge, AZ
Electronic Materials and HSS Hire.
Tony is a Chartered Accountant
with a wealth of financial
experience gained during multiple
senior roles in high profile large
companies and as a Chair of Audit
Committees. He also brings to the
Board his business turnaround and
growth experience from his time
as CFO then CEO at Laird.
Tony possesses the recent and
relevant financial experience in
accounting and auditing required
to effectively Chair the Audit
and Risk Committee. Tony was
previously chief financial officer
of Drax Group, held senior finance
roles at Marks & Spencer and
was senior independent director
and chair of the audit committee
for the Port of London Authority
and non-executive director of
Associated British Ports.
• Keller Group plc; senior
independent director and
non-executive director with
responsibility for workforce
engagement.
• The Royal Countryside Fund;
trustee.
• None. • Member of the Business in the
Community Leadership Council.
• Construction Skills Mission
Board; infrastructure lead.
• Hill & Smith Holdings PLC;
senior independent director
and chair of the remuneration
committee.
• NextEnergy Solar Fund Limited;
chair.
NON-EXECUTIVE DIRECTORSEXECUTIVE DIRECTORS
42 Costain Group PLC | Annual Report and Accounts 2025
Steve Mogford
Independent
Non-Executive Director
Amanda Fisher
Independent
Non-Executive Director and
Workforce Engagement Director
Fiona MacAulay
1
Independent
Non-Executive Director
Steve was appointed to the
Board in November 2023 and
became Chair of the Sustainability
Committee in August 2025.
Amanda was appointed to the
Board in December 2023 and
became Workforce Engagement
Director in March 2025.
Fiona was appointed to the Board
in April 2022 and became Chair of
the Remuneration Committee in
May 2022.
With a firm commitment to ESG,
Steve is an experienced executive
and non-executive director with
extensive expertise in water and
defence, together with experience
of contracting and complex joint
ventures.
Steve was chief executive officer
of United Utilities Group PLC
from 2011 until March 2023 and
led significant growth during that
period. During 30 years at BAE
Systems Plc, Steve held various
senior positions before being
appointed chief operating officer
and a member of the board. Steve
was previously senior independent
director of G4S plc.
Amanda was CEO of Amey, the
engineering and infrastructure
company, from 2019 until 2022.
With considerable expertise in
transportation, infrastructure and
defence, Amanda restructured the
business, redefining the strategy,
building strong client relationships
and improving contract risk
and performance, leading to its
successful sale in 2022.
Prior to Amey, Amanda held two
managing director positions at
Balfour Beatty plc, improving their
market share in key sectors, and
held a senior management position
at the construction firm, Alfred
McAlpine. Amanda is a passionate
advocate for ESG including
diversity and inclusion.
Fiona is an experienced
non-executive director and
remuneration committee chair
within the resources and industrial
sectors including upstream oil
and gas. Fiona has extensive
experience in ESG, has completed
Diligent’s Climate Leadership
Program and is a member of
Chapter Zero, a community of
business leaders taking ownership
of the climate challenge.
Fiona has experience in
operations, large programmes,
stakeholder and global supply
chain management from BG
Group, Mobil, Rockhopper
Exploration and Echo Energy.
Fiona is a past president of
American Association of Petroleum
Geologists Europe and a former
non-executive director of
Chemring Group PLC.
• QinetiQ plc; senior independent
director.
• Intertek Group plc;
non-executive director.
• Ferrexpo plc; senior
independent director and chair
of the remuneration and ESG
committees.
• Dauch Corporation;
independent director.
• Rosebank Industries plc;
non-executive director.
1
Formally registered at Companies House
under legal name, Fiona Barkham.
• None.
Audit and Risk Committee Nomination Committee Remuneration Committee Sustainability Committee Chair
C
Board
independence
Board –
length of service
Board diversity –
gender
Independent Directors 5
Non-Independent
directors
Chair Independent on appointment.
2
1–3 years 2
>3 years 5
Male 3
Female 4
C
43Strategic ReportOverview Governance Financial Statements
Executive Board
Running the business
Appointed
Skills and competencies
External appointments
Catherine Duffy
Chief People and
Sustainability Officer
Nicole Geoghegan
General Counsel and
Company Secretary
Alex Vaughan
FRICS, FICE
Chief Executive Officer
Helen Willis
ACA
Chief Financial Officer
Appointed in July 2022.Appointed in May 2019. Appointed in November 2020. Appointed in September 2019.
Nicole is a highly experienced
General Counsel and Company
Secretary with an extensive
background in major/mega
projects and infrastructure,
covering the full asset lifecycle.
Nicole spent six years on the
HS2 project as general counsel
and company secretary prior to
joining Costain. She has significant
international experience in rail/
transport, engineering and project
services, and is an expert in public
sector procurement,
fit-for-purpose governance and
effective risk management.
For more information please
go to page 42.
For more information please
go to page 42.
Catherine joined Costain in 2006
and has performed a number
of roles, including as director of
learning and development and
corporate responsibility (CR),
and investor relations director.
In 2019, Catherine became Group
HR Director and in 2022 took
on additional responsibility for
sustainability, becoming Chief
People and Sustainability Officer.
Highlights of Catherine’s career
with Costain include developing
and implementing the Group’s
first CR strategy, achieving
Platinum status in Business in the
Community’s CR Index in 2013,
driving change to achieve the
Group’s recognition in the Times
Top 50 Employers for Women
2018–2021 and Costain being cited
as a game changer in 2019 for its
work on gender parity in early
careers recruitment. Catherine is
a qualified executive coach and
graduated with an honours degree
in environmental science.
• None.• None.For more information please
go to page 42.
• None.
44 Costain Group PLC | Annual Report and Accounts 2025
Jonathan Willcock
Managing Director of
Transportation
Peter Mumford
Managing Director of
Natural Resources
Paul Morris
Group Commercial Director
Appointed in April 2024.Appointed in January 2026. Appointed in July 2024.
Jonathan was appointed
Managing Director of
Transportation in April 2024.
He has a wealth of experience in
infrastructure and joined Costain
from Skanska, where he was
managing director of Skanska UK’s
infrastructure division, working
to increase revenue and market
share and delivering complex
projects in sectors including
highways, rail, energy and water.
Prior to that, Jonathan was
managing director of Alstom
Transport UK’s systems, signalling
and infrastructure division,
growing the business and
winning and delivering key work
for Network Rail, TfL and other
transport bodies.
Peter was appointed Managing
Director of Natural Resources
in January 2026. With more
than 20 years’ experience in
complex engineering, programme
management and consultancy
environments, he brings a wealth
of expertise in building and leading
high-performing teams across the
private and public sector.
Prior to joining Costain, Peter
was managing director of Balfour
Beatty’s regional civils business in
the UK. He also spent five years
at Highways England (now known
as National Highways), leading
the delivery of the government’s
£27.0bn road investment strategy
and more than 15 years in
engineering and construction
consultancy businesses, including
Aecom, EC Harris and Turner and
Townsend.
Paul was appointed as Costain’s
Group Commercial Director in
July 2024 after originally joining
Costain in August 2011. Paul
has performed a number of
commercial leadership roles across
the business, most recently as
commercial services director.
He has 30 years of experience
in people, project and commercial
management. Prior to joining
Costain he was group commercial
director for Promanex Group.
Paul holds a master’s degree
in business administration from
Newcastle University.
• None.• None.• None.
45Strategic ReportOverview Financial StatementsGovernance
Compliance with the 2024 UK Corporate Governance Code
As a listed company on the London Stock Exchange, and in respect of the financial year ended 31 December 2025, the Company is
reporting in accordance with the 2024 UK Corporate Governance Code (the Code), which sets out standards of good practice. The 2024
Code is published by the Financial Reporting Council (FRC) and is available on its website www.frc.org.uk.
During 2025, Costain was compliant with all provisions of the Code that are currently in force. On the following pages we explain our
approach to Corporate Governance, demonstrating how the Board and its Committees has fulfilled their responsibilities to ensure robust
governance practices are embedded throughout the Group to support business performance and deliver the strategy.
Governance at a glance
Leading a responsible business
UK Corporate Governance Code – application of Code Principles
The table below sets out where the required reporting on the Principles can be located in this 2025 Annual Report.
1 Board leadership and Company purpose
A Effective Board / pages 42, 43, 51 and 52
B Purpose, values and culture / pages 8, 22, 50, 53 and 60
C Board decisions, strategy and objectives / pages 8 and 9, 16
to 21, 47 and 50
D Stakeholder engagement / pages 18 to 23, 50, 53, 60 and 61
E Workforce policies and practices / page 41
2 Division of responsibilities
F Board leadership / pages 42, 43 and 47 to 52
G Independence and division of responsibility / pages 42, 43,
48 and 51
H Non-Executive Director role / pages 48
I Board resources /page 47
3 Composition, succession and evaluation
J Appointments to the Board / pages 51, 58 to 61
K
Board skills, experience and knowledge, service length /
pages 42, 43, 59 and 86
L Annual Board evaluation / page 52
4 Audit, risk and internal control
M
Integrity of financial reporting, external auditor and internal
audit /
pages 54 to 57
N Fair, balanced and understandable reporting / page 55
O
Internal controls framework and effective risk management /
pages 34 to 39, 55 and 56
5 Remuneration
P
Linking remuneration policies and practices with purpose,
values and strategy / pages 62 to 68
Q Remuneration Policy review / pages 68 to 74
R Performance outcomes in 2025 / pages 75 to 88
46 Costain Group PLC | Annual Report and Accounts 2025
Our governance structure
The Board is collectively responsible for overseeing and guiding the Company, and holding management to account. The Board’s main
role is to create long-term sustainable value for shareholders by providing prudent leadership and taking into account the interests of all
stakeholder groups. It does this by setting the Company’s strategic priorities and overseeing their delivery, ensuring that the necessary
financial and other resources are available, and by maintaining a balanced approach to risk within a framework of effective controls.
We held six meetings in 2025. At each full Board meeting, the Board considers a saftey moment, a safety, health and environment
(SHE) report, CEO (including business and project updates) and CFO reports, an investor relations update, a legal update, a people and
sustainability report, a risk deep dive and, if required under the matters reserved for the Board, work winning approvals.
Operation of the Board
The Chair sets the Board’s agenda and ensures that adequate
time is available for discussion of all agenda items. To discharge
their duties, the Directors are provided with full and timely access
to papers prior to Board meetings via a fully encrypted electronic
portal system. Directors have access to all information relating to
the Group, and are provided with adequate information to enable
them to make an assessment of the Company’s performance
with regard to risks (including those related to ESG), both over
the short and long-term, thus enabling them to objectively
analyse and make decisions on opportunities to promote value
and growth for the Company. Directors are free to seek any
further information they consider necessary. After each meeting,
the General Counsel and Company Secretary operates a
comprehensive follow-up procedure to ensure that actions are
completed as agreed by the Board.
Senior Executives and high potential employees below Board level
are invited to attend Board and Committee meetings from time to
time to deliver presentations on issues that are relevant to their
particular business sector or function.
Between Board meetings, the Chair and Non-Executive Directors
have access to the Chief Executive Officer, Chief Financial Officer
and General Counsel and Company Secretary.
The Chair and Non-Executive Directors also receive monthly
management accounts, internal audit reports and regular
management reports and information, which enables them to
scrutinise the Group and management’s performance against
agreed objectives. The Board is also kept up to date on legal,
regulatory and governance matters by the General Counsel and
Company Secretary and external advisers.
The General Counsel and Company Secretary is responsible
for ensuring that Board procedures and applicable rules and
regulations are followed. The appointment and removal of the
General Counsel and Company Secretary is a matter reserved for
Board approval.
The Board also obtains advice from professional advisers as and
when required at the expense of the Company.
47Strategic ReportOverview Governance Financial StatementsFinancial StatementsStrategic ReportOverview
Our governance structure continued
Costain Group PLC Board of Directors
Board Committees
Key responsibilities:
The Board has established Committees, which are responsible for audit and risk, remuneration, appointments
and succession, and sustainability. Each Committee plays a vital role in ensuring that high standards of corporate
governance are maintained throughout the Group, which enhances the performance of the business.
Remuneration Committee
Key responsibilities:
Determines the remuneration for
the Chair, Executive Directors and
certain Senior Managers.
Oversees Costain’s overall
remuneration policy, strategy
and implementation. This includes
the alignment of incentives with
reward and culture, and takes
into account employees’ pay and
rewards when setting the policy
for Directors’ remuneration.
Sustainability Committee
Key responsibilities:
Advises the Board on the
Company’s sustainability
programme and its alignment with
the Company’s strategy and key
risks and opportunities.
Endorses ESG programmes, plans
and targets for Board approval.
Endorse external reporting in
relation to ESG and sustainability
matters.
Audit and Risk Committee
Key responsibilities:
Monitors and reviews the integrity
of Costain’s financial statements.
Manages the relationship with the
external auditor.
Oversees the Company’s systems
for internal control (including
the internal audit plan and audit
outcomes) and risk management.
Oversees the Company’s
whistleblowing framework and
receives reports on investigations.
Nomination Committee
Key responsibilities:
Monitors and reviews the
composition of the Board and its
Committees to ensure that the
right structure, skills, diversity
and experience are in place for
the effective management of the
Group.
Reviews management
development, succession
planning and the talent pipeline in
respect of the Company’s Senior
Executives.
48
How we divide up our responsibilities
Chair
The Chair, Kate Rock, is responsible for the effective leadership and operation of the Board. The Chair
promotes high standards of governance and supports and guides the CEO.
Chief Executive
Officer
The CEO, Alex Vaughan, is responsible for managing the business of the Company through the implementation
of policies and strategies approved by the Board. The CEO maintains constructive dialogue with the Chair, the
Group’s shareholders on strategy and performance, and other stakeholders.
Senior Independent
Director
The role of the Senior Independent Director, Tony Quinlan, involves providing a sounding board for the
Chair and providing support to her, acting as a point of contact for shareholders to raise any concerns not
addressed adequately through normal channels and meeting with the other Non-Executive Directors, without
the presence of the Chair or Executive Directors, to discuss such matters as the Chair’s performance.
Non-Executive
Directors
The Non-Executive Directors all bring valuable experience, insight and perspective to the Board, through their
former or current Executive roles and their other Non-Executive positions, which are held across a wide range
of businesses and disciplines. This facilitates robust input and decision making by the Board as a whole. The
Non-Executive Directors, including the Chair, also meet without the Executive Directors present from time to
time as a matter of good corporate governance.
Costain Group PLC
| Annual Report and Accounts 2025
Key governance documents
No changes were made to the schedule of matters reserved to the Board or to the Terms of Reference of Board Committees in
2025. The matters reserved for the Board and Committee Terms of Reference, which are reviewed at least annually, can be viewed in
the Corporate Governance section of the Company’s website. The members of each Committee and details of their attendance are
shown on pages 42, 43, and 51.
Safety, Health and Environment
(SHE) Committee
Key responsibilities:
Responsible for setting and monitoring compliance
with the Group’s SHE policies.
Acts as a consultation forum to enable best advice to be given
to the Executive Board (and to guide the Group SHE Director and
Chief People and Sustainability Officer) on matters relating to
safety, health, environmental protection and climate change.
Risk and Assurance
Committee
Key responsibilities:
Reviews and guides Costain’s approach
to risk management including trends.
Considers any whistleblowing investigations and trends (via a
sub-committee).
Monitors delivery of the internal audit plan, reviews
audit outcomes and tracks actions to completion.
Strategic Investment
Panel
Key responsibilities:
Responsible for approving significant
levels of bid resourcing and for approving
(or endorsing to the Board) certain
investments.
People
Committee
Key responsibilities:
Makes decisions in relation to people
on behalf of the Executive Board.
Makes recommendations to the Executive
Board (or Board, as relevant) in relation to
strategic, people matters.
Monthly/Quarterly
Business Reviews
Key responsibilities:
Reviews financial and operational
performance of projects to ensure
economic and efficient delivery.
Executive Board
Key responsibilities:
Accountable for the day-to-day running of the business, delivering the Group strategy, business plan
and budget, and managing the operational and financial performance of the Group.
Architecture Board
Key responsibilities:
Manages/oversees Costain’s overall enterprise systems architecture
to ensure efficiency, effectiveness and alignment of same.
49Strategic ReportOverview Governance Financial StatementsFinancial StatementsStrategic ReportOverview
Chair’s Introduction
Dear shareholder
In 2025, we have continued to maintain high standards of
corporate governance across the Group to support business
performance. The Board promoted Costain’s values, reinforced
diverse views and provided constructive challenge, took account
of the workforce and wider stakeholders, and oversaw the Group
risk management programme. The Board complied with the 2024
UK Corporate Governance Code (the Code) during the year.
Board and Committee governance
Building on the deep-dive review conducted by our Company
Secretary and General Counsel in 2023 into our Board and
Committee governance framework and the work undertaken as
part of the external review into the effectiveness of the Board
in 2024, the Board has kept the governance structure and
Committee membership under review and is satisfied that the
three Board Committees – Nomination Committee, Remuneration
Committee, and the Audit and Risk Committee – have all operated
effectively during the year. Reports from the Chair of each of
these Committees can be found on pages 58 to 61, 62 to 88, and
54 to 57.
Board activities during 2025
15%
40%20%
25%
Culture, corporate
responsibility and
stakeholder
engagement
Strategy, risk,
performance and
operations
Governance and
other matters
Safety, health and
environment
How the Board spent its time
Strategy
Value creation was a key strategic item for consideration at Board
meetings during 2025. After obtaining significant shareholder
approval at the May AGM for the Company to purchase its own
shares, the Board considered and concluded that an on-market
share buyback programme was an appropriate and
value-enhancing use of cash, while maintaining the Group’s
financial flexibility to continue to invest in its strategy to
deliver sustainable growth and attractive returns. The Board
consequentially approved the £10.0m share buyback programme,
which started in June and concluded in August 2025, resulting in
6,395,100 shares repurchased and subsequently cancelled (please
see page 20 for more information).
In July, the Board came together for a strategy session where
growth opportunities were considered and prioritised. Business
improvements were identified, and we reviewed our portfolio,
competitive differentiators and customer relationships. Further
details of our strategy are on page 8.
Sustainability Committee
Following the decision, in 2024, to establish a dedicated
Sustainability Committee, the Board has discussed and approved
the Terms of Reference for the Committee and appointed its Chair,
Steve Mogford. The Sustainability Committee held its inaugural
meeting in January 2026 and will formally report into the Board
during the 2026 cycle. See our governance structure on pages 48
and 49 for more information.
Workforce Engagement Director
During the year, we appointed Amanda Fisher, who joined the
Board in 2023, as our Workforce Engagement Director with effect
from 4 March 2025. Amanda has provided us with valuable insight
from employees and shared her findings at Board meetings during
the year, as well as directly with the Chief Executive Officer and
the Chief People and Sustainability Officer. Further information
may be found on page 53.
Board Performance Review
This year, we have considered and actioned recommendations put
forward as part of the 2024 externally facilitated review (please
see page 52 for further information). We have also conducted an
internal Board Performance Review in the format of interviews
between each Director and the General Counsel and Company
Secretary.
Risk management
During the year, management undertook its annual review of
the Company’s risk appetite and risk management framework,
the outcomes of which were endorsed by the Audit and Risk
Committee and the Board. The Board also received deep-dive
presentations of several of the Group’s principal risks, including
securing work and responding to changes in customer spending
plans, project set up, mobilisation and delivery. The Board confirms
that it has completed a robust assessment of the Company’s
emerging and principal risks.
Further details of all Audit and Risk Committee matters are
provided in the Audit and Risk Committee Report on pages 54 to
57.
In addition, Board members used their engagement visits to sites
(see page 53) as an opportunity to lead conversations on risk.
Culture
The Board has an important role in setting and developing the
culture of the Company and uses several leading and lagging
indicators to make an informed assessment of the Company’s
culture. Towards the end of 2025, the Company carried out its
annual Group-wide employee engagement survey with support
from Best Companies. The results of which have been shared with
the Board. We were delighted with the participation level as it
gives us a wealth of information on what we do well and areas for
focus. We maintained our accreditation, as a Best Companies One
Star organisation, meaning Costain is, and continues to be, a ‘very
good’ company to work for.
Kate Rock
Chair
9 March 2026
50 Costain Group PLC | Annual Report and Accounts 2025
51Strategic ReportOverview Governance Financial Statements
Attendance and Composition
Meeting attendance
The Board meets regularly and held six scheduled meetings during the year. The Directors’ attendance record at scheduled Board and
Committee meetings for the year ended 31 December 2025 is shown in the table below. Attendance is based on eligibility to attend as
members. The table below does not indicate regular attendance of non-members.
Board attendance
Scheduled full Board
and strategy meetings
Audit and Risk
Committee
Remuneration
Committee
1
Nomination
Committee
Executive Directors
Alex Vaughan 6/6 – – –
Helen Willis 6/6 – – –
Non-Executive Directors
Kate Rock 6/6 – – 2/2
Amanda Fisher 6/6 4/4 3/3 2/2
Fiona MacAulay
2
5/6 4/4 3/3 2/2
Steve Mogford
3
6/6 3/4 2/3 1/2
Tony Quinlan 6/6 4/4 3/3 2/2
1
No Director attended Remuneration Committee meetings for discussions regarding their own remuneration.
2
Fiona MacAulay was unable to attend the November Board meeting due to a family bereavement. She was provided with materials in advance of the meeting and provided
comments to the Chair in advance of the meeting.
3
Steve Mogford was unable to attend the December Committee meetings due to a prior commitment. He was provided with materials in advance of the meeting and provided
comments to the respective Chairs in advance of the meeting.
Board composition
The Board currently comprises the Chair, two Executive Directors
and four Independent Non-Executive Directors. The membership
of the Board and biographical details of all the Directors can be
found on pages 42 and 43.
The Non-Executive Directors have a range of business,
construction, risk management, sector and financial experience
that is relevant to the Company to support the delivery of the
strategy. The Board is enhanced by the varying lengths of service,
gender balance and expertise of all the Directors, together with
the mix of skills and experience as depicted in the chart on page
59. The Non-Executive Directors provide constructive challenge,
strategic guidance and specialist advice.
Board independence
Having due regard to the conduct of Directors, the Board
considers that each of its Independent Non-Executive Directors
standing for re-election continues to be independent in character
and judgement, and there are no relationships or circumstances
that are likely to affect (or could appear to affect) the judgement
of such Independent Non-Executive Directors.
The Board confirms that the Directors continue to perform
effectively, that they demonstrate commitment to their particular
roles, that they ensure proper time is devoted to Board and
Committee meetings and should, therefore, be re-elected at the
forthcoming AGM. The current terms of appointment of all the
Directors are set out in the Directors’ Remuneration Report on
page 86.
At the time of her original appointment as a Director in November
2022, Kate Rock, Chair, was considered independent by the Board.
Directors’ external appointments
The Non-Executive Directors may serve on other company
boards provided they continue to demonstrate the requisite
commitment to discharge their duties to the Company effectively.
Such external appointments are seen as beneficial to the overall
decision-making process of the Board as a whole.
The Company may encourage, when appropriate, the Executive
Directors to take up non-executive positions, with the prior
consent of the Board, in the belief that such appointments
broaden their skills and enhance the contribution that they can
make to the Company’s performance. Generally, no more than one
such appointment may be undertaken by the Executive Directors.
At present, neither Executive Director has such an appointment.
Ongoing Board training
As regards the continuing professional development of the
Executive and Non-Executive Directors, independent of any formal
training arranged by the Company, they are encouraged to attend
seminars and conferences on issues relevant to their appointment
as directors of a public company, particularly matters concerned
with corporate governance, ESG, audit, risk and remuneration
issues, and cyber security.
In addition, Board site visits are considered essential to ensure
that Directors have a thorough understanding of business
operations and issues that affect the Group and its workforce.
During the year, the Board and the Audit and Risk Committee have
received presentations from our legal advisers and auditor on
the 2024 UK Corporate Governance Code and financial reporting
developments.
Board induction
On appointment, new members of the Board take part in a tailored
induction programme, organised by the General Counsel and
Company Secretary. There were no new Directors appointed in
2025.
Financial StatementsStrategic ReportOverview
52
Board Performance
2024 review
The Board Performance Review in 2024 was an externally facilitated review, which was conducted by third-party specialist consultant
Clare Chalmers. During 2025, the Board reviewed the outcomes of the 2024 review and assessed how it had performed against the
findings:
Succession planning Workforce Engagement Director
The Nomination Committee reviewed succession planning for a
number of senior executive roles as well as considering key skills
of the Board. See pages 58 to 61 for further details.
During the year, the Board appointed Amanda Fisher as
Workforce Engagement Director to lead the Board’s interaction
with the workforce. Amanda has met with various employees
in 2025 (please see page 53 for more information), and feeds
back the employee voice at Board meetings, as well as directly
to the Chief Executive Officer and the Chief People and
Sustainability Officer. Outcomes of visits are also shared with
the General Counsel and Company Secretary. Members of the
Board continue to engage with employees via attendance at the
bi-annual Impact Day and during any other office and site visits.
The Chair also attended the Senior Leadership Conference.
Information presented to the Board
The Board discussed the presentation of reports and the
information being presented to the Board. As a consequence,
papers have evolved and become more strategic, leading to
improved Board discussions.
Risk management programme Sustainability Committee
Reporting on principal risks and project risks has been a key
agenda item for the Board in 2025. There have also been
presentations on how to prepare for the change in reporting
under provision 29 of the UK Corporate Governance Code 2024.
The Board spent time setting the foundations for the Committee
during 2025, ensuring that the Committee had the correct focus.
The inaugural meeting of the Committee was held in January
2026.
2025 review
The 2025 review was conducted internally via individual interviews with the General Counsel and Company Secretary. Questions asked
were aligned to those used in the last internally managed review, to enable comparison with the results. The outcomes were presented
back to the Board for consideration at its December meeting. A summary of key items for focus in 2026 include:
Area Action
Governance
Embed governance reporting to the Board from the Sustainability Committee and Workforce
Engagement Director.
Board composition Review existing Board composition and consider whether additional skillsets are required.
Succession planning
Provide further opportunities for the Board to meet with Senior Executives and high potential
employees.
Meeting management Consider holding pre-meetings to run through complex matters.
Workforce engagement Increase visibility of the Board with workforce.
Customer engagement Develop greater customer insight in Board reporting.
The 2025 review built on the findings from the 2024 review and concluded that the Board and Committees continue to operate
effectively, highlighting that the culture of the Board was one which was collegiate, collaborative and respectful, and inputs were
provided constructively by the Non-Executive Directors.
The Senior Independent Director also conducted a review of the Chair’s effectiveness. His review found that meetings were well chaired,
promoting openness and debate.
Costain Group PLC
| Annual Report and Accounts 2025
53Strategic ReportOverview Governance Financial Statements
Workforce Engagement
Engagement with, and feedback from, the workforce are vital
to maintaining a sustainable business and the Board received a
people report at each meeting. This is not limited to Company
employees but also includes sub-contractors and agency
workers in Costain’s extensive supply chain.
In compliance with the 2024 Code, we have adopted a workforce
engagement mechanism. For 2025, this involved direct contact
between Directors and a diverse cross section of the workforce
through a range of engagement activities. In 2025, we further
evolved this engagement and appointed our Non-Executive
Director, Amanda Fisher as our Workforce Engagement Director.
Costain also uses interactive two-way dialogue through
mechanisms such as the employee networks, engagement
surveys and the Your Voice forum. In addition, the Board continues
to use a number of recognised indicators of culture.
The Board also receives detailed information on the annual
employee engagement survey and the subsequent actions.
Our Non-Executive Directors carry out engagement visits to
our offices, projects and sites to gain further insights into the
business, such as health, safety and environmental practices
and performance, operational efficiencies and knowledge of
customer relationships.
As part of these visits, a Q&A session is normally held by
the Board member with members of the site team (including
employees and representatives of the supply chain and
customers). At the end of each visit, the Non-Executive Director
provides feedback to the CEO, the General Counsel and
Company Secretary, and other members of the Executive Board,
where appropriate, capturing key information and observations
from the visit. Relevant themes are then discussed at Board
meetings and appropriate actions agreed.
Two Company-wide leadership impact days were held in
May and October. These impact days bring together all our
site-based employees, joint venture partners, the supply
chain and customers, and focus on important safety, health
and environment issues. The May Impact Day focused on
engagement, encouraging feedback on hazards, good practice
and methods for raising issues. Our Workforce Engagement
Director, Amanda Fisher, joined the team at HS2 Tunnels and
Shafts.
Following on from feedback on previous impact days, the
October Impact Day was moved to coincide with the start
of shift briefings to allow more staff to attend, and this was
borne out by the reflections of our visiting leaders. Our Chair,
Kate Rock, took part in this impact day at HS2 West Ruislip and
Amanda Fisher joined the event from HS2 Atlas Road.
In addition, Kate Rock made a number of site visits during the
year to the Devonport, South East Strategic Reservoir Option
(SESRO), Anglian Water and Thames Tideway projects.
Amanda Fisher also made a number of site visits during the
year to Seven Trent, A30, Thames Tideway and a night visit to
Heathrow. Amanda also took part in our Women in Engineering
day and held discussions with the Urenco mobilisation team.
These visits were primarily focused on engagement with the
workforce and observing safety procedures in action.
Site visits give Board members the opportunity to get a
first-hand feel for how our business works from the perspective
of our employees. At each site, Board members were impressed
with how deeply consideration for safety matters is embedded
across the organisation and saw for themselves the challenging
working conditions at some of our sites and observed how
safety risks are managed on a daily basis.
In July, the Board held its meeting at our Manchester office and
were impressed by the showcase presentations received on
the Graduate and Apprentice Network, Climate Resilience and
Adaptation, and our Project Controls Framework with EDF.
Engagement visits to sites
s
Outputs from
engagement
surveys
Health and
wellbeing
performance
Internal audit
and report
findings
Progress in
respect of
diversity and
inclusion
Whistleblowing
reports
Safety
performance,
initiatives and
trends
Engagement
visits
to sites
Employee
networks
WORKFORCE
ENGAGEMENT
Financial StatementsStrategic ReportOverview
Audit and Risk Committee Report
I have been Chair of the Audit and Risk Committee (the
Committee), which is comprised of Independent Non-Executive
Directors, since May 2021. The members of the Committee and
details of their attendance at Committee meetings are shown
above and on page 51, and their biographies are shown on pages
42 and 43. The General Counsel and Company Secretary is
secretary to the Committee.
The Board considers that I possess the necessary recent and
relevant financial experience to effectively Chair the Committee
and am competent in accounting and auditing. In addition,
the Committee as a whole possesses relevant skills and
competence and sector knowledge to meaningfully discharge the
responsibilities of the Committee.
The meetings of the Committee in 2025 were attended by the
Group Chair, the Chief Executive Officer, the Chief Financial
Officer, the Lead Internal Audit Partner and another senior
representative from Forvis Mazars (the Group’s Internal Auditor),
the Risk and Assurance Director, the Group Director of Finance
and the External Auditor. Other senior executives attend as
required to provide information on matters being discussed that
fall within their remit. In 2025, the Committee met privately, with
no management present, with the External Auditor and the Lead
Internal Audit Partner immediately after Committee meetings. The
Committee met four times during 2025.
This report sets out primary areas of the Committee’s focus in 2025.
In accordance with its Terms of Reference, and in compliance with
the 2024 Code, on behalf of the Board, in 2025 the Committee:
• reviewed management’s proposed recommendations in relation
to risk management and internal control specifically in relation to
Provision 29 of the 2024 Code;
• monitored the integrity of the Group’s financial statements and
formal announcements relating to the Group’s performance, and
reviewed significant financial judgements contained in them,
having also received reports from the External Auditor on the
outcome of its audit and review;
• provided advice on whether the Annual Report, taken as a
whole, was fair, balanced and understandable, and provided the
information necessary for investors to assess the Company’s
position and performance, business model and strategy;
• reviewed the Company’s internal financial controls and internal
control and risk management systems, and the processes for
management of the principal risks facing the Group;
• monitored and reviewed the effectiveness of the internal audit
function;
• reviewed the effectiveness of the external audit process
and made recommendations to the Board in relation to the
reappointment and remuneration of the External Auditor, and as
required by the Companies Act 2006, conducted a tender for
the External Auditor;
• ensured that an appropriate relationship between the Group
and the External Auditor was maintained, and reviewed
non-audit services and fees, and the External Auditor’s
independence; and
• reviewed its Terms of Reference and determined that no
changes were required in 2025 but noted that the Terms of
Reference would be further considered in early 2026 in light
of the changes introduced by the Corporate Governance
Code 2024 relating to controls, which will become effective for
financial years commencing on or after 1 January 2026.
Committee members
1
Attendance
Amanda Fisher 100%
Fiona MacAulay 100%
Steve Mogford
2
75%
Tony Quinlan 100%
1 All Committee members are Independent Non-Executive Directors.
Please see page 42 and 43 for their individual biographies.
2 Steve Mogford was unable to attend the December Committee meeting due to a
prior commitment. He was provided with materials in advance of the meeting and
provided comments to the Chair in advance of the meeting.
Please see the meeting attendance chart on page 51 for more information.
How the Audit and Risk Committee spent its time
Financial reporting and external
audit
Internal audit, risk management
and internal control
Governance and other matters
15%
35%
50%
54 Costain Group PLC | Annual Report and Accounts 2025
In addition, the Committee also spent time on the following:
• reviewed the significant judgements relating to contract
positions, provisions, including rectification provisions, fire
safety compliance claims, litigation and other risks. The
Committee received detailed reports including relevant legal
advice;
• considered the Auditor’s year-end materiality benchmark.
PricewaterhouseCoopers LLP (PwC) set this at £5.2m
taking into account the sector and nature of the Company’s
contracting activities; and
• received updates at each meeting on the progress of the
latest triennial valuation of the Costain defined benefit pension
scheme (the Scheme), which concluded that the funding
level (on a Technical Provisions basis) was more than 101%. In
January 2026, we announced that an agreement had been
reached with the Trustee of the Scheme to remove the dividend
parity arrangement that previously existed. In addition, a new
schedule of contributions has been agreed and no further
cash contributions will be required to be made by Costain until
January 2031.
Risk management
During 2025, the Committee reviewed the risk management
process and controls system and concluded they were effective,
noting the enhancements in, amongst others, work winning and
in-contract delivery risk management made since the previous
review. The Committee also reviewed the Group’s principal risks
(including emerging risks) and the risk management framework
(see pages 34 to 39). The Board received deep-dive presentations
from management on individual principal risks during the year.
The Committee reviewed the Board’s agreed risk appetite and
reviewed emerging risks against tolerances.
The Committee discussed internal audit findings on fraud risk
management and the whistleblowing process and reviewed
regular whistleblowing updates.
Significant accounting matters
The Committee, or the Board, where scheduling of meetings was
more suited, spent a substantial amount of time considering key
accounting issues, matters and judgements in relation to the
Group’s financial statements and disclosures relating to:
(A) Material contract judgements
As detailed in note 2 on pages 112 to 120 of the financial
statements, a significant proportion of the Group’s activities
is undertaken via long-term contracts. These contracts are
accounted for in accordance with IFRS 15, Revenue from
Contracts with Customers, which requires that revenue is only
recognised when it is considered highly probable not to reverse.
Management uses detailed contract valuations and cost forecasts
when formulating its judgements of costs and revenues and
its assessments of the expected outcome of each long-term
contractual obligation. Given the Group’s portfolio of contracts, the
Committee spent considerable time during the year reviewing the
positions and judgements taken by management on a number of
material contracts. As a result of its review, and having discussed
this area in detail with management and with the External Auditor,
the Committee concluded the accounting position taken in the
Group’s long-term contracts was appropriate.
(B) Pension
The Group’s defined benefit pension scheme requires significant
judgements to be made in relation to the assumptions for
inflation, future pension increases, discount rate and member
longevity, which underpin the valuation. Each year, in selecting the
appropriate assumptions, the Company takes written advice from
an independent qualified actuary. The Committee has critically
reviewed these assumptions and considers them to be reasonable.
These assumptions and sensitivities are set out in note 21 on
pages 143 to 147 of the financial statements.
(C) Going concern and viability statement
The Committee considered the requirements of the 2024 Code as
it applies to the Group’s viability statement, including the
three-year period of assessment, which aligns with the Group’s
planning horizon and the processes supporting the viability
statement. The Committee considered the various scenarios that
were presented as part of the viability assessment, which included
a reverse stress test, mitigations and severe but plausible scenario
analysis relating to the Group’s principal risks.
The Committee assessed the appropriateness of the downside
scenarios and determined that there was sufficient headroom
to agree with the Board’s confirmation that the Group has a
reasonable expectation to continue in operation and meet its
liabilities as they fall due over the viability period. Alongside
the liquidity and debt positions of the business, the Committee
determined that the three-year measurement period continued
to be appropriate, and that the viability statement (see page 40)
should be recommended to the Board for approval. Please see
note 2 on page 113 of the financial statements for going concern
information.
(D) Accounting and other regulatory
developments
There are no significant changes to the Group’s accounting
policies in 2025.
The Company reports under Financial Reporting Standard 101
‘Reduced Disclosure Framework’, permitting certain disclosure
exemptions in this Annual Report (see note 2 on page 112).
There are no other new standards in 2025, only amendments to
existing standards (as disclosed in note 2). These amendments did
not have any impact on the amounts recognised in prior or current
periods and are not expected to materially affect future periods.
Fair, balanced and understandable
The process to ensure the Group’s financial statements, taken
as a whole, are fair, balanced and understandable is:
• comprehensive guidance issued to all contributors;
• verification process dealing with the factual content
of the report;
• review of the disclosure judgements made by the contributors
from various functions;
• comprehensive reviews undertaken to ensure consistency
and overall balance; and
• review undertaken by the Committee prior to recommendation
to the Board.
55Strategic ReportOverview Gover n ance Financial Statements
Audit and Risk Committee Report continued
Audit, risk and internal control
The Board assumes ultimate responsibility for the effective
management of risk across the Group. However, the Committee
supports the Board in its monitoring of the Group’s internal
financial controls and internal control and risk management
systems, and monitoring and reviewing the work of the internal
audit and risk functions.
Internal audit
The internal audit and risk functions have an integral role in
the Company’s governance structure, providing independent
assurance and advice to help the Group achieve its strategic
priorities. The Committee agreed the 2025 audit plan to be
undertaken by the internal audit team and assessed the adequacy
of the budget and resources.
The audit plan is based on risk, strategic priorities and
consideration of the control environment. Progress against the
plan is monitored. The Committee reviews the results of the
internal audit reports at each meeting.
Management is responsible for closing out actions to address
issues raised by internal audit within the agreed timetable and the
timely completion of such actions is reviewed by the Committee.
Where internal or external circumstances give rise to an increased
level of risk, the audit plan will be modified accordingly during the
year, if appropriate.
The lead internal audit partner from Forvis Mazars reports to the
CFO and has a direct relationship with the Committee Chair with
whom he has regular briefings without management present. The
CFO line manages the Risk and Assurance Director, who also has a
direct relationship with the Committee Chair.
At the December meeting, the Committee received a report from
Forvis Mazars, which covered progress against the 2025 audit
plan together with the reasons certain audits had been paused
or reprioritised, the status of management actions in response to
audit findings and the proposed content of the 2026 audit plan,
which was approved by the Committee.
The effectiveness of internal audit is assessed by the Committee by:
• reviewing the results of an annual questionnaire completed by
individuals who have exposure to, and contact with, the internal
audit function;
• evaluating internal audit reports; and
• meetings with the Chair of the Committee (and with the
Committee) without management present.
The 2025 review concluded positive progress had been made
during the year with a constructive relationship with management
and production of audit reports of a high standard, with such
reports benefiting from Forvis Mazars’ independent perspective.
Areas for further focus have been identified such as: increasing the
profile and visibility of internal audit and increasing the frequency of
sharing best practice guidance and industry/sector insights.
The Committee is satisfied the function is competent to deliver the
2026 internal audit plan.
Internal control and risk management
Details of the Group’s internal control and risk management
framework are more fully set out on pages 34 to 39 in the
Strategic Report and on page 50 in the Governance Report and
page 91 in the Directors’ Report.
The Group’s principal risks are set out on pages 34 to 39.
In preparation for the required declaration in the 2026 Annual
Report and Accounts in relation to Provision 29 of the 2024 Code,
the Committee has evaluated the effectiveness of the systems of
internal control operated within the Group. The evaluation covered
all material controls. They encompassed a review of: assurance
results; reports on malfeasance allegations; the Group’s approach
to anti-bribery and corruption, and whistleblowing; and reports
from both the internal and external auditors. The review did not
identify any significant weaknesses in the system of internal
control and risk management. Work to monitor and evidence the
Group’s material controls will continue during 2026.
External Auditor
The Company’s External Auditor is PwC. After a competitive tender
process in 2016, PwC was appointed as Auditor from the 2017
audit. Chris Richmond succeeded Andrew Paynter, as our audit
partner, effective upon completion of the 2024 audit.
During the year, in accordance with the UK Corporate Governance
Code, the Audit and Risk Committee commenced a competitive
tender process for the external audit for the year ending
31 December 2027. They appointed a panel comprised of selected
members of the Committee and management, and invited a
shortlist of audit firms to participate, which included challenger
firms and the incumbent, PwC.
The panel followed a transparent process to ensure firms have the
experience, capability and capacity to perform a
high-quality audit. As part of this process, each firm has confirmed
their independence, or ability to achieve independence, and the
panel has reviewed the Financial Reporting Council’s assessment
of the audit quality of each. Following a thorough evaluation of
proposals and with firms having presented in person, a report
on the selection procedure, including a recommendation, was
presented to the Board at their meeting in March 2026 and Ernst
and Young was appointed as Auditor for the year ending 31
December 2027. The Committee is satisfied that the process was
fair, transparent, and in the best interests of shareholders.
Costain received a letter from the FRC on 25 November 2025
advising that the Annual Report and Accounts for the year ended
31 December 2024 had been included in their selection for their
thematic review of reporting by the UK smaller listed companies.
As part of their procedures, the FRC carried out a limited scope
review of the Company’s Annual Report and Accounts with no
questions or queries raised. The FRC noted a small number of
matters for improvement, which have been addressed in the Annual
Report and Accounts for the year ended 31 December 2025.
We note that the role of the FRC is to consider compliance with
reporting requirements, not to provide assurance that the 2024
Annual Report was correct in all material respects.
56 Costain Group PLC | Annual Report and Accounts 2025
Effectiveness of the external audit process
During the year, the Committee considered the effectiveness of
PwC as External Auditor. As part of this process, external audit
effectiveness questionnaires were completed by members of the
Committee, the Executive Directors, other members of the Executive
Board and certain members of the finance and risk functions.
As part of this evaluation, the Committee considered the
robustness of the audit process and the quality of delivery,
reporting, people and service. Based on the responses to the
questionnaires, the General Counsel and Company Secretary
produced a report for consideration by the Committee. The
Committee confirmed that it remained satisfied with the efficiency
and effectiveness of the external audit in respect of the year
ended 31 December 2025. It was noted there was strong
cooperation between PwC and Costain and that both PwC and
Costain were committed to bringing continuous improvement to
the process.
At its meeting in December 2025, the Committee considered and
approved the external audit plan for the audit of the Group for
the year ended 31 December 2025. The Committee considered
significant risk areas for the audit, the proposed scope and the
materiality threshold. Thirteen subsidiary companies sought
exemption from audit for 2025 as permitted under the relevant
regulations, thereby improving Costain’s efficiency.
Auditor independence and objectivity
Auditor independence and objectivity are an essential part of
the audit framework and the assurance it provides. The Auditor’s
independence is, therefore, monitored throughout the year. For
example, the Committee has reviewed PwC’s own policies and
procedures for safeguarding its objectivity and independence and
the arrangements that PwC has in place to identify, report and
manage conflicts of interest. PwC is required to rotate the lead
audit partner every five years to ensure a fresh outlook without
sacrificing institutional knowledge. Chris Richmond succeeded
Andrew Paynter as lead audit partner effective upon completion of
the 2024 audit.
At meetings throughout the year, the external auditor displayed
professional sceptisim and challenged managements’ judgement
and assumptions.
The Committee is not aware of any relationships between the
External Auditor, the Company or members of the Committee,
that bear on the External Auditor’s integrity, independence and
objectivity. The Committee reviews all services being provided
by the External Auditor annually to assess its independence and
objectivity. The Committee takes into consideration relevant
performance and regulatory requirements to ensure these are not
impaired by the provision of permissible non-audit services (see
below).
The Committee believes the independence and objectivity of PwC
and the effectiveness of the audit process remains strong and has
therefore recommended the reappointment of PwC for 2026. PwC
will be shadowed by Ernst and Young who will be recommended
for appointment by shareholders at the 2027 AGM.
Non-audit fees
During the year, the Committee reviewed the policy on the
provision of non-audit services by the External Auditor (which, as
above, ensures that such services do not impair the independence
or objectivity of the External Auditor) and determined that no
changes were required to the policy originally adopted in 2021 and
reviewed annually. The policy sets out a number of key principles
that underpin the provision of non-audit services by the External
Auditor: the External Auditor should not audit its own firm’s work;
make management decisions for the Group; have a mutuality of
financial interest with the Group; or be put in the role of advocate
for the Group.
In 2025, the value of non-audit work performed by PwC for the
Group was less than £0.1m (2024: less than £0.1m) other than in
relation to the review of the half-year financial statements. Please
see note 5 to the Financial Statement for further information on
Audit fees.
Whistleblowing and counter-fraud/integrity
Costain’s Internal Fraud and Ethics Lead continues the valuable
work of whistleblowing investigation, promoting Costain’s
‘integrity’ value and mitigating risk of malfeasance.
All new staff are required, as part of their onboarding process,
to complete a training module, which identifies the importance
of acting with integrity at all times and includes details of
the Company’s whistleblowing line (which is provided by an
independent third party).
During 2025, all staff were required to complete the annual ‘Code
of Conduct’ training, which included modules on the responsibility
of all employees to call out wrongdoing and other integrity
behaviours, such as, declaring conflicts of interest and complying
with the Company’s gifts and hospitality policy. The cascade of
the Code of Conduct training includes a video from the Chief
Executive Officer as to the importance of the training.
The Committee receives six-monthly reports on the nature and
number of referrals to the whistleblowing line, the outcomes of
the resulting investigations and any process improvements that
are recommended, and also the work done to further improve
the Company’s fraud risk management framework. There were
29 whistleblowing reports in 2025 (51 in 2024). These reports
were made via the whistleblowing line or referred directly to the
Company’s Fraud and Ethics Lead.
In September 2025, a three-year Fraud Strategy setting out
a proactive and comprehensive framework to safeguard the
organisation and its clients from fraud, bribery and corruption was
finalised. This framework is based on robust risk assessments,
deterrence, prevention, detection and investigations measures
and supported by strong governance, training and a culture of
fraud awareness across our people and supply chain.
Committee Performance Review
The 2025 Board Performance Review was internally facilitated and
encompassed the Committee Performance Review. Please see
page 52 for more information.
Tony Quinlan
Committee Chair
9 March 2026
57Strategic ReportOverview Governance Financial Statements
Nomination Committee Report
Governance of the Committee
The Nomination Committee (the Committee) is comprised of myself
as Chair, together with the other Non-Executive Directors. The
members of the Committee, together with their biographies, are
shown on pages 42 and 43 and details of their attendance at
Committee meetings is shown on page 51. The General Counsel
and Company Secretary is secretary to the Committee. The
Committee met twice in 2025.
Only members of the Committee have the right to attend
Committee meetings. Other individuals, such as the Chief
Executive Officer, Chief Financial Officer, Chief People and
Sustainability Officer, members of senior management and
external advisers may be invited to attend meetings as and
when appropriate. This report sets out the primary areas of the
Committee’s focus in 2025.
The outcome of all Committee meetings is reported to the Board
for its consideration. The Committee may take independent
professional advice on any matters covered by its Terms of
Reference at the Company’s expense.
Role of the Committee
In accordance with its Terms of Reference, which remain
unchanged following a review in December 2025, and in
compliance with the 2024 Code, the Committee is responsible for:
• reviewing the overall size, structure and composition of the Board;
• identifying and nominating candidates, for the Board’s approval,
to fill Board vacancies as and when they arise;
• receiving notifications from Directors of situations, such as
proposed external appointments, in which a potential conflict of
interest might arise and/or their time commitment to the Board
could be compromised;
• recommending to the Board the reappointment of those
Directors who are offering themselves for re-election at the
Annual General Meeting following due consideration of the
Board’s policy on independence and the results of periodic
Board performance reviews;
• formulating plans for succession for both the Executive
Directors and Non-Executive Directors;
• reviewing succession planning arrangements and development
plans for other senior employees; and
• reviewing periodically the effectiveness of the Committee’s
own performance, which forms part of the regular evaluation
and development work conducted by the Board to ensure it
continues to improve its overall effectiveness.
The Company recognises the importance of diversity at the
Board and all levels of the Group. The diversity and inclusion
policy applies to the Board and its Committees and covers broad
diversity aspects such as gender, ethnicity, sexual orientation,
disability and socio-economic background.
Activity in 2025
Following the outcomes of the 2023 and 2024 Board
effectiveness review, Executive Board composition, succession
and development, and ensuring we have the right balance of skills,
experience and diversity at the Board, and most senior levels of
our business, have been key areas of focus.
The recruitment of an additional Non-Executive Director to bolster
and complement the existing Board skill set has been an area of
focus for the Committee during the year. In considering the proposed
candidate, key diversity criteria related to gender and ethnicity will
be considered alongside skillset. Any appointment will continue to be
based on merit, taking into account the importance of having diverse
perspectives on the Board.
Committee members Attendance
Kate Rock 100%
Amanda Fisher 100%
Fiona MacAulay 100%
Steve Mogford
1
50%
Tony Quinlan 100%
35%
25%
40%
How the Nomination Committee spent its time
Performance, balance
and composition reviews
Governance and other
matters
Succession planning
1
Steve Mogford was unable to attend the December Committee meeting
due to a prior commitment. He was provided with materials in advance of
the meeting and provided comments to the Chair in advance of the
meeting.
Please see the meeting attendance table on page 51 for more information.
5858 Costain Group PLC | Annual Report and Accounts 2025
6
ESG and Sustainability
Transportation – Road
3
3
Transportation – Rail
4
Natural Resources – Water
3
Natural Resources – Energy
6
Natural Resources – Defence and Nuclear Energy
7
Strategy/M&A
4
Technology/Digital
3
Communications/Marketing
6
Risk Management
6
Construction/Engineering/
Complex delivery
4
Consultancy
5
Long-term contracting
4
Finance/Audit/Banking
7
General management
7
People – Culture/EDI/succession/talent/reward
5
Government/Political relations
5
Health/Safety
6
Investor relations
6
PLC – Corporate governance
Skills and competencies (all seven Directors
1
)
1
Self-assessment based on strong or very strong experience.
Succession planning for the Executive team has also been a
key area of focus for the Committee in 2025. Over the last few
years, we have increased the diversity of our workforce, reduced
our gender pay gap and created a more inclusive environment.
However, while progress has been made and strengths
recognised, there continues to be a challenge of ethnic diversity
in Costain senior leadership roles, together with lower levels of
diversity in contract leadership roles. This is a trend reflected
across the industry. However, across the total workforce, our
diversity is improving. The limited diversity within the talent pools
identified for senior management succession emphasises the need
for our continued focus on our equality, diversity and inclusion
(EDI) targets and ambition, and why we include EDI targets in
our Long Term Incentive Plan (LTIP) (see pages 82 and 83 of the
Directors’ Remuneration Report).
The Executive Board was strengthened by the appointment of
Peter Mumford as Managing Director, Natural Resources in January
2026 and the restructure of the Executive Board, as a reflection of
the Group’s current structure. The Committee has also considered
succession plans for the roles of Chief Executive Officer and Chief
Financial Officer as well as the wider Executive team.
For more information on our ethnicity and gender pay gaps, please
see pages 22 and 60 and our separate integrated gender and
ethnicity pay gap report at www.costain.com.
Female representation at Board level remains at 57% and the
representation of ethnic minorities at 0%.
Our principles on Board diversity also apply to the Executive Board
and currently 42% (three of seven) of our Executive Board are female
and 0% (nil of seven) of our Executive Board is of non-White ethnicity.
Further details of the work undertaken to support the development
of a diverse pipeline, our measurable objectives that have been set
for implementing the policy, and progress made in achieving these
objectives, can be found on pages 60 and 61.
Committee Performance Review
The Committee’s performance was considered as part of the
internal Board Effectiveness Review in 2025, which built on
the externally facilitated Board Performance Review that was
undertaken during 2024 (please see page 52 for more detail). The
key areas of focus for the Committee from these reviews are the
succession planning of the Executive Directors and Non-Executive
Director recruitment.
Directors
As per the recommendations set out in the 2024 Code, and our
approach in previous years, all our Directors in post will be standing
for re-election by shareholders at the upcoming AGM.
The Committee considered all Board members’ other appointments
and commitments and the impact on their time availability in view of
general investor concerns regarding overboarding. All new external
appointments have been approved by the Board, as required under
the 2024 Code, as have any actual or potential conflicts of interest.
For example, in 2025, Tony Quinlan advised the Committee that
he had been offered an additional role as Non-Executive Chair of
NextEnergy Solar Fund and Fiona MacAulay advised that she had
been invited to join the Board of Rosebank Industries plc as a
Non-Executive Director. The Committee considered the nature of
these roles and the time commitment required and determined they
would not represent a conflict of interest nor impact the amount of
time Tony Quinlan and Fiona MacAulay could devote to their roles
at Costain and, therefore, approved these additional appointments.
The Committee reviews the balance of skills on the Board on an
annual basis and each Director self-assesses their level of expertise
against each category determined as important by the Committee
as summarised in the table above. The Committee, on behalf of
the Board, is satisfied that Board members have sufficient time,
knowledge and commitment to discharge their roles at Costain
effectively. This has been evidenced during the past year when
Board members have again contributed fully and effectively.
Appointment of Directors
There were no Board changes in 2025. As mentioned previously,
the Committee has focused on reviewing the existing Board skills
matrix and identified the key skills and attributes required from the
next Non-Executive Director appointment, with the search to be
initiated in 2026.
As part of the recruitment process, the Committee follows a
rigorous and transparent process, using an external search partner
to scope the role and ensure that a diverse slate of candidates
is considered. Shortlisted candidates will be interviewed by the
Chair, Senior Independent Director and other Board members and
considered by the Committee prior to making a recommendation to
the Board for appointment.
Kate Rock
Committee Chair
9 March 2026
Sector knowledge
59Strategic ReportOverview Governance Financial Statements
Equality, diversity and inclusion
Committed
Costain is committed to maintaining a diverse Board and
champions diversity at all levels of the organisation, recognising
diversity is fundamental to effective decision making and
delivering high performance. Costain is committed to a culture
of inclusion and has an Executive team that actively champions
equality, diversity and inclusion.
The Board remains committed to maintaining a positive position
compared to the targets set out in the UK Listing Rules UK LR
6.6.6R (10), and chooses a reference date of 31 December 2025
(see table on page 61);
• By 2025, women to make up at least 40% of a company’s board
positions — for 2025 Costain had women representing 57% of
the Board (please see Board biographies on page 42 and 43 for
more information).
• At least one of the senior Board positions (Chair, Senior
Independent Director (SID), CEO or CFO) is a woman – for 2025,
Kate Rock held the role of Chair and Helen Willis held the CFO
role.
• At least one member of the Board is from a minority ethnic
background – following the Board changes which took place
during 2024, the Board is entirely composed of Directors of
white ethnicity. The Nomination Committee is actively searching
for an additional Director to complement the existing Board.
The Committee is following a rigorous and transparent process,
working with an external search partner to scope the role and
ensure that a diverse slate of candidates with the required skills
and experience are considered. Shortlisted candidates will be
interviewed by the Chair, Senior Independent Director and other
Board members and will be considered by the Committee, prior
to an appointment recommendation being put forward to the
Board. The new Director will then be subject to election and
annual re-election by shareholders at the Company’s AGM.
Costain is supportive of the Parker Review recommendations and
has set a target for 9% of senior management to identify as being
of an ethnic minority by 2027.
The Board places high importance on increasing diversity in senior
management and recognises the importance of developing a
diverse leadership pipeline. For 2026, the LTIP grants will continue
to include performance metrics relating to the diversity of the
employees forming job grades D—F (a population that comprises
middle management).
Progress
In 2025, women comprised 31% of our employee population,
increasing from 29% in 2024. Women also held 42% of Costain’s
senior management roles and 43% of our Executive Board.
At 17.3% (2024: 16.5%) ethnic minorities are also steadily increasing
as a proportion of our employee population (5% Black colleagues,
9% Asian colleagues, 2% Mixed Heritage and Other Heritage
colleagues).
Board Diversity
We are pleased to report that our 2025 median gender pay
gap decreased by 3.3 percentage points year on year and our
median ethnicity pay gaps have also decreased over the same
period. These decreases are a result of much hard work, including
our development programmes to unlock talent and enable our
colleagues to thrive in their careers at Costain.
Progress in meeting the Company’s objectives is monitored by the
Board and targets are included in the performance measures of
the Executive Board and senior management.
Initiatives
The business continues to focus on job grades D—F as part of the
year’s targets as demographic data suggests that this focus for
underrepresented groups could unlock barriers to progression
and, in turn, further enhance our performance and positively
impact our gender and ethnicity pay gaps.
In 2025, we have created over £600k in social value, derived
in part from our commitment to the skills agenda, through
apprenticeships and work experience placements, which continue
to create meaningful opportunities for individuals and communities.
In 2025, we ran the third cohort of Empower, our programme that
focuses on the progression of women in the business. We also ran
listening circles with employees from different ethnic backgrounds
to understand different experiences of progression and reward
and the potential impacts on our ethnicity pay gaps.
We monitor diversity data (including disability) at all stages of our
recruitment process. We remain focused on preventing bias in
our systems and processes related to recruitment, development
and reward. In 2024, Costain was awarded Disability Confident
Leader status, in part due to the actions taken to ensure that
our recruitment and development processes are inclusive and
accessible.
In 2025, 326 of colleagues shared that they have a disability or
long-term health condition, compared to 148 in 2024. We maintain
strong partnerships with organisations including WorkFit and
DFN Project Search and actively participate in disability-focused
networks such as The Valuable 500 and the Hidden Disabilities
Sunflower scheme. Our Disability and Wellbeing Network
plays a central role in embedding lived experience into policy
development, workplace design and cultural initiatives, supporting
continuous improvement in accessibility and inclusion.
We are taking a data-led approach to addressing our pay gaps
and we actively create feedback culture through our employee
networks, annual employee engagement survey and listening
circles. We are committed to continuous improvement and
regularly benchmark ourselves against external standards to
identify opportunities to become a more inclusive employer.
See our website www.costain.com for more information on our
commitment to recruiting a diverse workforce.
6060 Costain Group PLC | Annual Report and Accounts 2025
Ethnicity representation at 31 December 2025
Employee representation
Number of
Board
members
Percentage
of the Board
Number of
senior positions
on the Board
(Chair, SID CEO
and CFO)
Number in
executive
management
Percentage
of executive
management
Number
in senior
management
Asian/Asian British 0 of 7 0% 0 of 4 0 of 7 0% 0 of 28
Black/African/Caribbean/
Black British
0 of 7 0% 0 of 4 0 of 7 0% 1 of 28
Mixed/Multiple Ethnic Groups 0 of 7 0% 0 of 4 0 of 7 0% 1 of 28
White British or other White
(including minority-White groups)
7 of 7 100% 4 of 4 7 of 7 100% 26 of 28
Other ethnic groups, including Arab
0 of 7 0% 0 of 4 0 of 7 0% 0 of 28
Not specified/Prefer not to say
0 of 7 0% 0 of 4 0 of 7 0% 0 of 28
Gender representation at 31 December 2025
Employee representation
Number of
Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(Chair, SID CEO
and CFO)
Number in
executive
management
Percentage
of executive
management
Number
in senior
management
Direct reports
of senior
management
Male
3 of 7 43% 2 of 4 4 of 7 57% 18 of 28 68%
Female
4 of 7 57% 2 of 4 3 of 7 43% 10 of 28 32%
Other categories 0 of 7 0% 0 of 4 0 of 7 0% 0 of 28 0%
Not specified/Prefer not to say
0 of 7 0% 0 of 4 0 of 7 0% 0 of 28 0%
Note: As at the date of this report, 9 March 2026, Board gender representation remains unchanged.
Note: As at the date of this report, 9 March 2026, Board ethnicity representation remains unchanged.
Collection of diversity data is by employee voluntary self-reporting through the HR system. Every employee is asked to disclose, if they
wish, their gender and ethnicity by selecting from a drop-down list of genders (Man, Woman, Non-Binary, Other and Prefer not to say)
and ethnicity (Asian, Black, Mixed, Not stated, Other, Prefer not to say and White).
Planned action in 2026
We continue to evolve our ways of working where possible to be fully inclusive and meet best practice by being a Stonewall Diversity
Champion, a member of Working Families, the Business Disability Forum, the Valuable 500, a signatory of the Armed Forces Covenant,
and a member organisation of Business in the Community (BITC). In 2026, we will be prioritising the following actions:
• strengthening recruitment from diverse talent pools, particularly into technical and site-based roles;
• supporting internal progression routes, including professional accreditation, supervisory development and chartership support;
• building retention and career visibility through mentoring and sponsorship for under-represented groups;
• strengthening gender equity outcomes, by developing meaningful conclusions and targeted actions informed by our Women’s
Listening Circles. Also, trying new approaches to move the dial on gender representation across all career grades. This will include
considering creative approaches to flexible working and job sharing to create a greater work-life balance culture; and
• continuing to embed an EDI lens into colleague engagement insights, by reviewing the outcomes of our 2025 engagement survey to
better understand engagement scores and qualitative feedback across different colleague groups and experiences.
61Strategic ReportOverview Financial StatementsGovernance 61
Directors’ Remuneration Report
Committee members
Director Attendance
Fiona MacAulay 100%
Amanda Fisher 100%
Steve Mogford
1
66%
Tony Quinlan 100%
1
Steve Mogford was unable to attend the December Committee
meeting due to a prior commitment. He was provided with
materials in advance of the meeting and provided comments
to the Committee Chair in advance of the meeting.
Please see the meeting attendance table on page 51
for more information.
Actual remuneration of our Executive Directors for 2025
and application of policy for 2026
CEO – Alex Vaughan CFO – Helen Willis
Base salaries
Pension
10% of salary in line with wider workforce 10% of salary in line with wider workforce
AIP – maximum opportunity
2025: 150% of salary
2026: 150% of salary
2025: 150% of salary
2026: 150% of salary
LTIP – maximum opportunity
2025: 100% of salary
2026: 125% of salary
2025: 100% of salary
2026: 125% of salary
Single figure total for 2025 £2,527,448 £2,103,703
2025 £536,328
2026 £555,099
2025 £443,291
2026 £465,456
Costain Group PLC | Annual Report and Accounts 202462 Costain Group PLC | Annual Report and Accounts 2025
How the Remuneration
Committee spent its time
Workforce remuneration
Remuneration of Directors
and Executive Board members
Governance and other matters
25%25%
50%
Remuneration Report at a glance
How was our performance reflected in Executive Director pay for 2025?
AIP – Award earned by Executive Directors for 2025
Adjusted
operating profit
1
(max opportunity:
40%)
Profit secured
for 2026
(max opportunity:
15%)
Cash flow
2,3
(max opportunity:
15%)
Safety, health
and environment
3
(max opportunity:
10%)
Strategic
objectives (max
opportunity: 20%)
Total achieved
(% max)
Actual pay-out
(% of salary)
4
Alex Vaughan 33% 13% 15% 5% 19% 85% 127.5%
Helen Willis 33% 13% 15% 5% 19% 85% 127.5%
1 See definition on page 116. Target underpinned by 90% cash conversion.
2 Measured as average month-end net cash balance, pre-acquisition and investments.
3 Please see page 65 for more information on calculations.
4 33% of the value of the AIP award for 2025 will be deferred into shares under the Share Deferral Plan (SDP).
LTIP – Award vesting for performance over the three years ending 31 December 2025 for Executive Directors
ESG (25% of the award)
Aggregate Adjusted
EPS
5
for financial
years ended
31 December 2023,
2024 and 2025
(50% of the award)
TSR growth
(25% of the award)
Environmental
(15% of the award)
Leadership gender
diversity
(5% of the award)
Leadership ethnic
diversity
(5% of the award) Total achieved
Achieved: 39.0
pence
Outturn: 50%
(maximum vesting
level: 35.6 pence
or more)
Achieved: 312%
Outturn: 25%
(maximum
vesting
level: 100%)
Achieved: 58%
Outturn: 15%
(maximum vesting
level: 19.8%)
Achieved: 42%
Outturn: 5%
(maximum vesting
level: 39%)
Achieved: 6%
Outturn: 1.3%
(maximum vesting
level: 9%)
96.3%
6
Ensuring shareholder alignment
33% of AIP bonus is
automatically deferred into
Costain shares with a
two-year holding period.
Subject to performance
targets being met, LTIP
shares vest after three
years but will only be
released after five years.
Share ownership guidelines are set at 200%
of salary for the Executive Directors
7
.
Alex Vaughan
214%
255%
Helen Willis
5 Measured as Adjusted basic earnings per share (see definition on page 116), further adjusted to exclude pension scheme interest.
6 The awards vest in April 2026 but are subject to a two-year holding period.
7 Calculated using the share price as at 31 December 2025 and includes balance of SDP shares net of shares sold to cover tax and national insurance.
63Strategic ReportOverview Governance Financial Statements
Alignment of our new Remuneration Policy with our strategy
50% EPS
25% Absolute TSR
15% Environmental: Reduction in
water pollution incident rate
10% Social: Gender and ethnic diversity
LTIP performance metrics – 2026
Wider workforce
We are committed
to paying the real
living wage to
all employees.
All employee share
plan – 32% take-up
of eligible employees
under the 2025 SAYE
invite.
Retained Best Companies 1 Star accreditation
as a ‘Very Good Company to work for’ in 2025.
Consistent increase in employee engagement over
the past four years, up 2.9% on 2024. Response
rate of 75%, with 95% of colleagues agreeing
that health and safety is taken seriously and 87%
agreeing that environmental sustainability is a
priority for Costain.
The annual salary
review budget for
April 2026 will be
3.5%, allocated based
on performance
and position in
salary range.
Percentage of females in senior management
positions: 36% at 31 December 2025.
Costain’s 2025 median gender pay gap decreased
by 3.3% year on year and the median ethnicity gap
has also decreased over the same period.
In our wider leadership community, 8% of
colleagues are BAME (2024: 5%) and 20%
female (2024: 19%).
274 people were
promoted in 2025.
Directors’ Remuneration Report continued
Link to strategic priority
To be an admired
growing company
Growth in strong
markets
Predictable best
in class delivery
A resilient
customer mix
A meaningful
consultancy service
45% Adjusted operating
profit with 90% cash conversion
15% Profit secured for 2027
15% Cash flow
10% Safety, Health & Environment
15% Strategic Objectives
AIP performance metrics – 2026
64 Costain Group PLC | Annual Report and Accounts 2025
I am pleased to present our Directors’ Remuneration Report for the year ended 31 December 2025. Our report explains the work of
the Committee and how we have implemented our Remuneration Policy approved at the AGM in 2023 during 2025. A summary of how
the pay for our Executive Directors is aligned with delivering our strategy and enhancing our performance in 2025 is shown in the
‘Remuneration at a Glance’ section on pages 62 and 63.
2025 remuneration in the context of our business performance and outcomes for our key stakeholders
The Committee has, as usual, considered Executive remuneration in the light of outcomes for the wider workforce, our shareholders and
other stakeholders by taking a fair, prudent and balanced approach to remuneration.
• We traded well with growth in operating profit and margin reflecting the improving quality of our contract portfolio and our more
predictable delivery performance.
• Our strong and growing net cash position, progression in our dividend (which we have reinstated since our last Policy renewal in 2023)
and share buyback programmes implemented in 2024 and 2025 are creating sustainable value for shareholders.
• As announced on 26 January 2026, a new agreement was reached with the Trustee of the defined benefit pension scheme that
removed the dividend parity arrangement that previously existed, taking away a significant constraint that had existed in respect of
returns to shareholders. Recognising this, we announced two intentions: to pay a dividend in line with our target of dividend cover of
3.0x adjusted earnings, and to undertake a £20m share buyback programme in FY 26.
• Compared against our high standards where we have delivered multiple years of record safety performance, 2025 was a challenging
year. Our LTIR rate for the year was 0.16 (FY 24: 0.11). Responding to the rise in minor injuries we undertook a review of our 2024 and
2025 incidents to identify and address any common themes. We implemented several actions, which resulted in a significant reduction
in injuries in the second half of 2025.
• The Company continues to make progress in building an industry-leading, diverse team, seeing overall gender and ethnic diversity
increase year on year, complemented with reductions in both the gender and ethnicity pay gaps. This is a result of actions we are
taking to drive progressive, sustainable and inclusive change.
• In January 2026, the inaugural Sustainability Committee approved the Group’s Decarbonisation and Nature Positive Plans. These plans
set the near-term actions required to maintain progress towards our goal to achieve net zero greenhouse gas emissions by 2045.
We’ve maintained our strong environmental performance, reducing incidents, waste and water consumption. For 2025, we are pleased
to report a 41% year-on-year decrease in emissions and continued improvements to data collection, which has significantly improved
since the introduction of our Environmental Construction Data Tracker in 2024. This is now giving us a more complete picture of our
emissions.
• The all-employee pay rise for 2025 was 3.5% (excluding promotions, the graduate half-year review and the structured increases for
our apprentices). Increases were targeted to provide meaningful awards with a focus on delivering higher increases to those identified
as being paid below market and high performers.
• Our latest all-employee engagement survey showed high levels of engagement and an increased Best Companies engagement score.
• In Autumn 2025, we invited employees to participate in the 2025 Sharesave grant. We had a take-up rate of 32% of our employees for
the 2025 invite.
Executive Director base salary increases and variable pay outcomes for the year ended 31 December
2025
In 2025, Alex Vaughan received a salary increase of 4%. As explained in the 2023 and 2024 Directors’ Remuneration Reports, this was the
second and final phase of a stepped increase implemented to ensure his salary is reflective of individual performance, experience and
responsibilities. Helen Willis received a salary increase in 2025 of 3.5%, in line with the average salary increase for the wider workforce.
The 2025 AIP comprised a mixture of financial and non-financial performance measures aligned with key strategic priorities. 70% was
based on financial measures (Adjusted operating profit, profit secured for 2026 and cash flow (see page 77 for more information)), and
30% on non-financial measures (safety, health and environment and strategic objectives (previously known as ‘personal performance’))
Based on the performance against these measures, Alex Vaughan and Helen Willis earned an AIP equal to 127.5% of salary, respectively.
When determining the AIP outturn, the Committee considered whether the formulaic outcome was reflective of underlying business
performance. As part of this assessment, the Committee considered the appropriateness of the payout on the cash flow metric which
is based on the average cash balance over the year. The outturn of £152.6m would have resulted in a 6% (out of a possible 15%) payout.
The Committee exercised its discretion to approve an additional 9% under this metric in recognition of the Group’s strong cash flow
performance for the year. This was the result of significant efforts made during the second half of the year in securing cash backed
contract finalisations and effective working capital management, which offset the timing of certain cash receipts, and working capital
movements during the year that impacted our average cash measure. Additionally, the payout on the Safety, Health & Environment
metric at 5% (out of a possible 10%) reflects our actual performance of 7.5% (out of a possible 10%), with a reduction of 2.5% discretion
applied by the Remuneration Committee, to reflect the safety performance in the year. One-third of the AIP earned will be deferred into
shares for two years. Further details are set out on page 77.
Annual Statement by the Chair of the Remuneration Committee
65Strategic ReportOverview Governance Financial Statements
The LTIP Award granted in April 2023 was subject to EPS performance for 50% of the award, absolute TSR performance for 25% of the
award and ESG performance for 25% of the award. Based on the performance against these measures, the 2023 LTIP award is due to
vest at 96.3% in April 2026. LTIP awards that vest will be subject to a two-year holding period by Executive Directors. Further details are
set out on page 79.
In line with good practice, these incentive outcomes were reviewed in the broader context of the stakeholder experience, including the
gain attributable to the share price increase since grant and the impact of the share buyback programmes conducted in 2024 and 2025
on the EPS element. The Committee considered that the outcomes are a fair reflection of the Group’s underlying financial performance
achieved in 2025 and throughout the performance period. The Committee noted that the buy-backs did not impact the level of vesting
of the EPS element. In addition, the share price gain reflected a sustained increase over the vesting period, with the post-vesting holding
period further aligning Executive Directors’ interests with long-term share performance. The Committee noted strong trading in 2025,
growth in Adjusted operating profit and margin, and the improving quality of our contract portfolio. As a result of these factors, the
Committee determined that the outcomes as set out on page 79 to be appropriate.
2025 LTIP awards
LTIP awards were granted to the Executive Directors in April 2025 at a level of 100% of salary. Awards are subject to Adjusted EPS
performance as regards 50% of the award, absolute TSR performance as regards 25% of the award and ESG performance as regards
25% of the award. Further details, including the performance targets, are set out on page 80.
Investor engagement and the new Directors’ Remuneration Policy
In 2025, the Committee has focused on the review and evolution of our Policy, which we will ask shareholders to approve at our AGM on
14 May 2026, in line with the normal three-year renewal cycle.
We are committed to aligning shareholder and Executive interests, maintaining an open and transparent dialogue with our shareholders
on Executive pay and listening to your views. The Committee consulted with the Company’s 10 largest shareholders in Q4 2025 and
Q1 2026, as well as the main proxy voting advisory agencies, on our Policy proposals.
I met with those shareholders who wished to discuss the proposals in more detail and responded in writing to those requesting more
information. Shareholders who provided feedback were supportive of the proposals. No significant concerns were raised in relation to
the approach described below, which is intended to ensure the Executive Directors are appropriately incentivised for delivering out-
performance and that the Policy is sufficiently flexible for the next three-year cycle.
• Separate caps for Annual Incentive Plan (AIP) and Long Term Incentive Plan (LTIP): Under the Policy approved in 2023, the
combined AIP and LTIP maximum opportunities for any year may not exceed 250% of salary with individual maximum opportunities for
AIP and LTIP of 150% of salary. To simplify the approach, the new Policy will not include the combined limit, but retains separate limits
as described below.
• No change to current AIP maximum opportunity: The maximum AIP opportunity under the Policy remains at 150% of salary and there
is no change to deferral arrangements with ordinarily one-third of any bonus earned deferred into shares for two years.
• Increased LTIP headroom: The new Policy introduces headroom to increase the maximum LTIP opportunity to 200% of salary.
The Committee firmly believes that the changes made in the new Policy will further strengthen the alignment between Executive reward
and the delivery of enhanced shareholder value creation. This underscores our commitment to incentivising and rewarding the delivery of
exceptional results by taking a fair and balanced approach to remuneration.
2026 LTIP awards
While an LTIP opportunity of 100% of salary is recognised as being at the lower end of the market compared to our peers, the
Remuneration Committee’s initial intention for the 2026 LTIP was to maintain this level. Our original proposal was to reserve the headroom
for specific circumstances, such as facilitating the recruitment or retention of an Executive Director; or addressing significant increases
in business scale and complexity. However, during our initial engagement with shareholders, a consistent theme emerged regarding the
importance of ensuring our Executive team is robustly incentivised to deliver out-performance and enhanced shareholder value creation.
Reflecting on this valuable feedback and underpinned by the Board’s confidence in Costain’s momentum to deliver sustained growth and
enhanced shareholder returns, the Committee has decided to make a modest increase to the maximum 2026 LTIP, from 100% of salary to
125% of salary. This decision acknowledges the Group’s strong performance, including a sustained period of improved financial results,
increased profitability, and robust cash generation, which has culminated in our re-entry into the FTSE 250. We considered introducing
a one-off out-performance LTIP element for 2026, potentially offering up to an additional 100% of salary based on the achievement of
exceptional adjusted cumulative EPS. However, on balance, we concluded that a modest increase to the LTIP quantum for 2026, coupled
with appropriately stretching targets, is a simpler and more transparent approach. This aligns effectively with our growth strategy to
deliver a step change in performance in FY 27 and beyond and create long-term sustainable shareholder value.
The 2026 LTIP will continue to be subject to performance conditions weighted at 50% for Adjusted EPS, 25% for TSR, and 25% for ESG
performance. Further details of the performance targets are included on page 82.
Directors’ Remuneration Report continued
66
Costain Group PLC | Annual Report and Accounts 2025
Reward for the year ended 31 December 2026
Executive Director base salary increase: For 2026, the annual salary review budget for the wider workforce is 3.5% with targeted higher
increases for those identified as being paid below market and high performers. Alex Vaughan will receive a salary increase of 3.5% (effective
1 April 2026). The Chief Financial Officer will receive a salary increase of 5% (effective from 1 April 2026) in recognition of the scope of her
responsibilities which have continued to expand since 2024, including the increased remit of the internal IT and Risk functions.
AIP: The maximum AIP opportunity for Executive Directors will be 150% of salary. The AIP will be weighted 75% on financial measures, 10%
on safety, health and environment and 15% on strategic objectives. Details of the AIP performance measures are provided on page 81,
and targets with performance against them will be provided in the 2026 Directors’ Remuneration Report. One-third of the AIP earned will
be deferred into shares for two years.
LTIP: As set out on page 66, the maximum LTIP opportunity for Executive Directors will be a 125% of salary. Details of the LTIP
performance measures are set out on page 82. LTIP awards that vest are only released after five years, thereby ensuring long-term
alignment of the Executive Directors’ and shareholders’ interests. Shareholders will also be asked at the 2026 AGM to approve an
amendment to the limit on participation included in the LTIP rules, in order that it is aligned with the new Policy.
Chair and Non-Executive Director Remuneration for 2026
Under delegated authority from the Board, the Executive Directors and the Chair have reviewed the fees for the Non-Executive Directors,
taking into account the scope of their roles, responsibilities, time commitments, and relevant market data. The Chair’s fee was independently
reviewed by the Remuneration Committee using relevant market data.
The Executive Directors and the Chair agreed fees of £6,250 for both the Workforce Engagement Director and the Sustainability Committee
Chair (with effect from 1 April 2026) to reflect the time involved to fulfil the roles. The Workforce Engagement Director fee had previously been
agreed as £5,000 for the period 1 January to end of March 2026.
With effect from 1 April 2026, the following fee increases will also be implemented:
• The Chair’s fee will increase to £250,000 (2025: £209,898).
• The Non-Executive Director base fee will increase to £62,500 (2025: £55,580).
• The fees for the Audit and Risk Committe Chair and the Remuneration Committee Chair will increase to £12,500 (2025: £10,764) and the
Senior Independent Director will increase to £12,500 (2025: £9,108).
These increases are designed to align the fees more closely with the market-competitive range for companies of a similar scale and
complexity. Furthermore, the Chair and NEDs are generally expected to use a proportion of the base fees paid during the year (net of tax)
to purchase shares.
Conclusion
We remain committed to a responsible approach to Executive pay and believe the policy operated as intended during the year. The
decisions made by the Committee regarding remuneration earned in respect of 2025 demonstrate our commitment to ensuring that
Executive Directors’ reward is aligned with performance and strong outcomes for all our stakeholders. We look forward to receiving your
support at our 2026 AGM, where I will be available to respond to any questions that shareholders may have on this report or our intended
approach to reward for 2026.
Fiona MacAulay
Committee Chair
9 March 2026
Definitions used in this report
AIP: Annual Incentive Plan.
Adjusted operating profit: Adjusted operating profit excludes adjusting items, which are significant items of income and expenditure
that the Board considers do not reflect the long-term performance of the Group. See note 2 of the financial statements for adjusted
metric details and definitions.
Adjusted EPS: Adjusted earnings per share is calculated using adjusted profit. See note 2 of the financial statements for adjusted
metric details and definitions. Underlying earnings per share is then further adjusted by the Remuneration Committee to exclude
pension interest to ensure that the performance measures are assessed on a consistent basis year to year.
LTIP: Long Term Incentive Plan (and including where relevant the plans approved in 2014, 2023 and amendments to be approved in 2026).
SDP: Share Deferral Plan (and including where relevant the plans approved in 2014 and 2023).
Remuneration disclosure
This report, approved by the Board, has been prepared in accordance with the provisions of the Companies Act 2006 and Schedule
8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). It also meets the
requirements of the UK Listing Authority’s Listing Rules and the Disclosure Guidance and Transparency Rules.
In this report, we describe how the principles of good governance relating to Directors’ remuneration, as set out in the 2024 UK
Corporate Governance Code, are applied in practice.
This report is unaudited unless otherwise stated.
67Strategic ReportOverview Governance Financial Statements
Directors’ Remuneration Report continued
Directors’ Remuneration Policy
The Directors’ Remuneration Policy for which approval will be sought at the 2026 AGM, is set out below.
Element
Purpose and link
to strategy Operation Performance metrics Maximum opportunity
Salary
• To attract and
retain high-calibre
individuals.
• Reflects skills,
experience and
performance in
role.
• Provides an
appropriate
level of basic
fixed income,
while avoiding
excessive risk
arising from
over reliance on
variable income.
• Generally reviewed annually (with any
change usually effective from 1 April)
but exceptionally at other times of the
year.
• Set with reference to individual
performance, experience
and responsibilities.
• Reflects the market rate for the
individual and their role, determined
with reference to remuneration levels
in companies of similar size and
complexity, taking into account pay
levels within the Company in general.
• Increases will usually not exceed the
average salary increases for the wider
workforce (in percentage terms).
• Higher increases may be awarded
in appropriate circumstances,
which include, but are not limited to,
where an individual is promoted or
changes role or where an individual
is appointed on a below-market
salary with the expectation that their
salary will increase with experience
and performance.
• N/A • To avoid setting expectations
of future salary increases
there is no maximum salary
value set under the policy.
Annual
Incentive
Plan
• To incentivise the
achievement of
key financial and
strategic targets
for the relevant
year without
encouraging
excessive risk
taking.
• Promotes greater
alignment with
shareholders.
• To facilitate share
ownership.
• Two-thirds paid in cash.
• Deferral into shares of one-third of
earned AIP; this vests following the
end of a two-year deferral period,
which ordinarily ends on the second
anniversary of grant (subject, ordinarily,
to continued employment and not being
under notice of termination, either given
or received, on the date of vesting).
Deferred share awards may be granted
as conditional awards or nil or nominal
cost options.
• The Committee may decide not to
operate deferral where the amount of
the bonus otherwise to be deferred
would, in the opinion of the Committee,
be so small as to make deferral
unduly administratively burdensome.
Executives may, with the approval
of the Committee, elect for a greater
proportion of the AIP award to be
deferred into shares.
• Deferred share awards may include the
right to receive a benefit determined
by reference to the value of dividends
that would have been paid by reference
to dividend record dates ending on
the date on which shares can first be
acquired. The benefit may assume
the reinvestment of dividends into
Costain’s shares on such basis as the
Committee determines.
• Shares provided under the AIP are
typically purchased by a trust on
behalf of the Group so as to not lead
to any dilution of shareholder interest.
• Awards may be subject to malus and
clawback as described on page 70.
• Not pensionable.
• The Committee considers and
approves the performance
measures and targets each year
and ensures they are aligned
with business strategy and are
sufficiently stretching.
• Financial metrics will comprise at
least 50% of AIP opportunity. Any
balance of the AIP opportunity will
be based on financial metrics and/or
non-financial metrics such as safety
and health targets and strategic
objectives.
• In setting financial parameters,
the Committee takes into account
the Company’s internal budgets
and, where applicable, brokers’
forecasts. The targets applying to
financial measures are based on
a sliding scale between 0% and
100%. Subject to the discretion to
amend the pay-out as referred to
below, up to 60% of the maximum
potential will be earned for on-target
performance. The targets applying
to non-financial measures are based
on a sliding scale between 0% and
100%.
• The Committee may amend the
payout if it considers that the level
of vesting that would otherwise
apply is not appropriate, including
where that level would materially
deviate from the intention of
the Policy, is unreflective of
underlying financial or non-financial
performance of the Group or
Executive Director over the relevant
period or is not appropriate in the
context of unexpected or unforeseen
circumstances.
• Maximum: 150% of salary.
68 Costain Group PLC | Annual Report and Accounts 2025
Element
Purpose and link
to strategy Operation Performance metrics Maximum opportunity
Long Term
Incentive
Plan
• Aligned to
main strategic
objectives
of delivering
sustainable
performance,
which in turn
should deliver
enhanced returns.
• Annual grant of performance shares,
which vest subject to performance
measured, usually, over three years.
Awards may be granted as conditional
awards or nil or nominal cost options
or, as referred to below in relation to
‘Qualifying LTIP’ awards, as options with
an exercise price equal to the market
value of a share when the option is
granted.
• Awards are subject to a further holding
period of two years following the end
of the performance period before they
are released (other than shares that are
released so that they may be sold to
cover any tax liability or exercise price
due in respect of the exercise).
• LTIP awards may include the right
to receive a benefit determined by
reference to the value of dividends
that would have been paid on vested
shares by reference to dividend record
dates in the period ending on the date
on which the vested shares can first be
acquired. The benefit may assume the
reinvestment of dividends into Costain’s
shares on such basis as the Committee
determines.
• Awards may be subject to malus and
clawback as described below.
• The Committee may, at its discretion,
structure an LTIP award as a ‘Qualifying
LTIP’ award consisting of a tax
qualifying option with an exercise price
equal to the market value of a share
when the option is granted, and an
‘ordinary’ LTIP award, with the ordinary
award scaled back at exercise to take
account of any gain made on the
exercise of the tax qualifying option.
The provisions of this policy will apply
to a tax-qualifying option with any
amendments necessary to take account
of the applicable tax legislation.
• The performance condition will
be based on one or more key
metrics aligned to the business
strategy, including but not
limited to, EPS, return measures,
cash-based measures, strategic/
transformation measures and/or
environmental measures.
• At least 75% of the opportunity
will be subject to financial and/or
share price measures.
• Subject to the discretion to
amend the pay-out as referred
to below, up to 25% of the
maximum is earned for threshold
performance, rising to 100%
for maximum with straight-line
vesting usually applying between
these points.
• The Committee has discretion
to vary the formulaic vesting
outturn if it considers that
the level of vesting that
would otherwise apply is not
appropriate, including where that
level would materially deviate
from the intention of the policy,
is unreflective of underlying
financial or non-financial
performance of the Group or
Executive Director over the vesting
period or is not appropriate in the
context of circumstances that
were unexpected or unforeseen at
the grant date.
• LTIP awards with a face
value of not more than 200%
of salary. For FY 26, the
maximum LTIP will be up to
125% of salary.
• If a Qualifying LTIP award is
granted, the value of shares
subject to the tax-qualifying
option will not count towards
the limit referred to above,
reflecting the provisions
for the scale back of the
ordinary LTIP award.
All-
employee
share
schemes
- SAYE
Scheme
• Offered to
employees, to
facilitate share
ownership and
provide further
alignment with
shareholders.
• SAYE Scheme operates with periodic
grants, which normally vest after three
or five years subject to continued
service.
• SAYE Scheme operates in accordance
with HMRC requirements as a tax
qualifying plan.
• If the Company adopted any other
all-employee share scheme, Executive
Directors would be eligible to participate
on the same basis as other qualifying
employees.
• Not subject to performance
conditions in line with usual
practice.
• Participation on the same
basis as other employees.
Pension
• To aid retention
and remain
competitive in the
market place.
• Annual pension allowance.
• Paid as a cash contribution to the
Defined Contribution pension scheme or
personal pension arrangements and/or
a cash supplement.
• N/A • A percentage of base salary
not exceeding the pension
contribution available to
the majority of the wider
workforce (which is currently
10%).
Other
benefits
• To aid retention
and be
competitive in the
market place.
• Healthcare
benefits to
minimise business
disruption.
• Company car (or car allowance) and fuel
allowance.
• Medical insurance.
• Life assurance.
• Other benefits as appropriate, for
example, relocation expenses and travel
and subsistence.
• N/A • N/A
69Strategic ReportOverview Governance Financial Statements
Share ownership guidelines
The Company has adopted share ownership guidelines to provide further alignment between the interests of the Board and the
Company’s shareholders. During employment, Executive Directors are expected to build and maintain a shareholding worth not less than
200% of base salary. Shares subject to LTIP awards for which the performance period has ended (ie which are in a holding period, or
which have been released but which are not exercised) and shares subject to SDP awards count towards the shareholding guideline,
on a net of assumed tax basis. Executive Directors are required to retain half of the shares acquired pursuant to the LTIP and SDP (after
sales to cover tax and any exercise price) until the shareholding guidelines are met.
The Committee has adopted a post-employment shareholding requirement. Shares are subject to this requirement only if they are
acquired from share plan awards (LTIPs and SDP awards) granted after 1 January 2023. Following employment, an Executive Director
must retain:
• for the first year after employment, such of their shares, which are subject to the post-employment requirement, as have a value for
these purposes equal to 200% of salary;
• for the second year after employment, such of those shares as have a value for these purposes equal to 100% of salary; or
• in either case, and if fewer, all of those shares.
The Committee retains discretion to vary the application of the share ownership guidelines in exceptional circumstances.
Notes
Performance measures
The choice of the performance metrics applicable to the AIP reflects the Committee’s aim that our annual incentives should balance the
delivery of stretching financial performance with non-financial indicators. Our approach to the performance metrics for the 2026 AIP
awards is described on page 81.
As set out above, at least 75% of the LTIP opportunity will be subject to financial and/or share price measures, with any balance based on
strategic/transformation measures and/or environmental/social measures. Our approach to the performance metrics for the 2026 LTIP is
described on page 82.
AIP and LTIP performance measures may be adjusted if the Committee considers that it would be appropriate to amend the performance
measures (eg to take into account a material acquisition or divestment) so that they achieve their original purpose.
Recovery provisions
The AIP (including the deferred awards delivered under the SDP) and LTIP awards are subject to ‘malus’ and ‘clawback’ provisions as follows.
For up to two years following the payment of the cash element of an AIP award, the Committee may require repayment of all, or part of, the
bonus in the event of a material misstatement or error in assessing performance measures, which has led to an overpayment of the bonus
or in the event of dismissal due to gross misconduct, or in the event of criminal behaviour, serious reputational damage or serious corporate
failure. Some, or all of, a deferred share award under the SDP may be clawed back (via a cancellation of the award) prior to vesting in
equivalent circumstances.
For up to two years following the vesting of an LTIP award (or part of an LTIP award) the Committee may require the repayment of all, or
part of, the award (which may be effected by the cancellation of unvested LTIP awards or vested but unreleased LTIP awards) in the event
of a material misstatement or error in assessing performance measures, which has led to an award vesting to a greater degree than would
otherwise have been the case or in the event of dismissal due to gross misconduct, serious corporate failure or serious reputational damage.
The Committee considers these time horizons appropriate on the basis that: it aligns with our AIP deferral period and the combined
performance and holding period under the LTIP; it provides sufficient time for any potential circumstances to arise; and it aligns with typical
market practice.
Incentive plan operation
The Committee will operate the AIP, SDP, LTIP, SAYE Scheme and any other all-employee share scheme according to their respective
rules. All discretions under those rules will be available under this Policy, except where explicitly limited under this Policy.
Share awards under the SDP, LTIP, SAYE Scheme, and any other all-employee share scheme (and any applicable performance conditions)
may be adjusted in the event of a variation of the Company’s share capital or a demerger, special dividend or other event which affects
the market price of a share. Share awards under the SDP and LTIP may be satisfied, in whole or in part, in cash, although the Committee
has no intention to settle any Executive Director’s award in cash and would do so only in exceptional circumstances, such as where there
was a regulatory restriction on the delivery of shares, or to settle tax liabilities arising in connection with the acquisition of shares.
Awards may vest early, in accordance with the plan rules, in the event of a change of control or other relevant event (such as a
winding-up or demerger). Where an LTIP award vests early, the extent of vesting will be determined taking into account the extent to
which the performance condition has been satisfied (as assessed by the Committee) and, unless the Committee determines otherwise,
the proportion of the vesting period that has elapsed.
Directors’ Remuneration Report continued
70
Costain Group PLC | Annual Report and Accounts 2025
Base salary, benefits and pension
AIP LTIP
Illustration of application of Remuneration Policy (£m)
The charts above illustrate the potential remuneration for each of the Executive Directors for 2026 under the Policy set out above in four
different performance scenarios.
Performance scenario
Fixed pay Variable pay
Base salary pension and benefits AIP LTIP
Minimum
• Salary effective 1 April 2026
• Pension contribution: 10% of salary
• Benefits as paid in 2025 N/A N/A
On-target 60% vesting (90% of salary). 50% vesting of the LTIP (62.5% of salary).
Maximum 100% vesting (150% of salary). 100% vesting of the LTIP (125% of salary).
Maximum plus share
price appreciation
As with the Maximum scenario, but assuming a 50% share price increase for
the purposes of the LTIP element.
71Strategic ReportOverview Governance Financial Statements
Chief Financial OfficerChief Executive Officer
£0.0m £0.0m£0.5m £0.5m£1.0m £1.0m£1.5m £1.5m£2.0m £2.0m£2.5m £2.5m£3.0m £3.0m
£0.6m £0.5m
Minimum
performance
Minimum
performance
£1.5m £1.2m
Performance
in line with
expectations
Performance
in line with
expectations
£2.1m £1.8m
Maximum
performance
Maximum
performance
£2.5m
£2.1m
Maximum
performance (with
50% share price
increase)
Maximum
performance (with
50% share price
increase)
100% 100%
42% 42%
29% 29%
25%
25%
34% 34%
39% 39%
33%
33%
24% 24%
32% 32%
42%
42%
Directors’ Remuneration Report continued
Service agreements and loss of office
The Executive Directors have service contracts that can be terminated by either party on the giving of 12-months’ notice. There is no
entitlement to the payment of a predetermined amount on termination of employment in any circumstances. There are no liquidated damages
provisions for compensation on termination within the Executive Directors’ service agreements. The Executive Directors’ service agreements
do contain provisions for payment in lieu of notice, but these are at the Company’s sole discretion.
The Company seeks to avoid any payment for failure. The circumstances of the termination (taking into account the individual’s performance)
and an individual’s duty and opportunity to mitigate losses are taken into account as appropriate having regard to the individual circumstances.
Our normal policy is to stop or reduce compensatory payments to former Executive Directors to the extent that they receive remuneration
from other employment during the compensation period and that any such payments would be paid monthly in arrears.
It is the Committee’s intention that any future service contracts will reflect the Policy.
Executive
Directors Date of contract Expiry date Termination payment
Remuneration
entitlement
Compensation on termination
following a change of control
Alex Vaughan 7 May 2019
Terminable on
12-months’
notice.
Base salary plus benefits ordinarily
paid monthly and subject to mitigation.
Benefits provided in connection with
termination may include for example,
pension, outplacement fees, payments
in respect of accrued holiday and legal
fees. In appropriate circumstances,
the Committee may agree that certain
benefits (such as medical insurance) may
be continued for a reasonable period
following termination of employment.
No other specific
entitlements are
contained within
our contracts.
No additional provisions other
than those contained in the
‘Termination payment’ column.
Helen Willis 30 November 2020
The treatment of any incentive payment on termination will be determined in accordance with the rules of the AIP, SDP or LTIP. The principal
provisions of the rules are summarised below. SAYE Scheme options may vest on termination in accordance with the Scheme rules, which do
not include any discretion on the part of the Committee. Awards under any other all-employee share scheme will be treated under the rules of
that scheme.
AIP
Ordinarily, there will be no entitlement to a bonus unless the participant is employed and not under notice at the bonus payment date.
In the event of termination due to death, redundancy, injury, ill-health, disability or retirement (a ‘good leaver’) a bonus (normally pro-rated for
time in service during the bonus period) may be earned at the discretion of the Committee. The Committee has discretion to pay the bonus
following the end of the year (subject to assessment of the performance measures) or at termination (subject to the Committee’s assessment of
the performance measures at that time).
The Committee retains discretion to pay the whole of the AIP award for the year of termination (and prior year) in cash (after assessment
of performance and, ordinarily, application of time pro-rating). The Committee would only pay the whole of the bonus in cash where the
termination was in compassionate circumstances (such as in the event of death or due to ill-health).
SDP
In the event of termination due to injury, disability, or any other reason at the Committee’s discretion, unvested SDP awards shall continue
and vest on the normal vesting date, unless, in exceptional circumstances, the Committee permits the award to vest at cessation. If a
participant dies, their unvested SDP awards will vest at that time.
Unvested SDP awards shall lapse on termination for any other reason.
LTIP Termination during the vesting period
Unvested LTIP awards will usually lapse on termination.
However, in the event of termination due to injury, disability, or any other reason at the Committee’s discretion, unvested LTIP awards shall be
retained. A retained award shall ordinarily continue and vest and be released on the normal timescale, although in exceptional circumstances the
Committee may permit the award to be released at vesting. The extent of vesting will be determined taking into account the extent to which the
performance conditions are satisfied and, unless the Committee determines otherwise, the proportion of the vesting period that has elapsed at the
date of cessation.
If a participant dies, their unvested LTIP awards will vest and be released at the date of cessation, with the extent of vesting determined
taking into account the extent to which the performance conditions are satisfied at that date (as assessed by the Committee) and, unless the
Committee determines otherwise, the proportion of the vesting period that has elapsed at the date of cessation.
Termination during the holding period
If a participant is dismissed during the holding period for misconduct, their award will lapse.
If a participant ceases employment during the holding period other than due to dismissal for misconduct, their award will continue and
be released (to the extent vested by reference to the performance conditions) on the normal release date, although the Committee has
discretion to release the award at cessation or at some other date between cessation and the normal release date.
Where a new Director is granted a ‘buy out’ award (as described on page 73) the leaver provisions would be determined at the time of
grant.
72 Costain Group PLC | Annual Report and Accounts 2025
Recruitment remuneration
In the case of hiring/appointing a new Executive Director, the Committee will typically apply the provisions of the Policy set out above.
However, the Committee retains the discretion to make payments or awards, which are outside the terms of the Policy to facilitate the
hiring of candidates of the appropriate calibre required to implement the Group’s strategy, subject to the principles and limits set out
below. The individual will move over time onto a remuneration package that is consistent with the approved Policy.
The Committee will not use its discretion to make payments or awards outside the Policy to offer a non-performance-related incentive
payment (for example a ‘guaranteed sign-on bonus’).
In determining appropriate remuneration, the Committee will take into consideration all relevant factors (including the quantum and nature
of remuneration) to ensure that arrangements are in the best interests of both the Company and its shareholders.
Circumstances in which the Committee may make payments or awards, which are outside the terms of the Policy, include (but are not
limited to) the following:
• an interim appointment is made to fill an Executive Director role on a short-term basis;
• exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on a short-term basis;
• an Executive Director is recruited at a time in the year when it would be inappropriate to provide a bonus or long-term incentive award for that
year as there would not be sufficient time to assess performance; subject to the limit on variable remuneration set out below, the quantum
in respect of the months employed during the year may be transferred to the subsequent year so that reward is provided on a fair and
appropriate basis; or
• the Executive Director received benefits in their previous engagement that the Committee considers it appropriate to recognise.
The Committee may also alter the performance measures, performance period, vesting period and holding period of the annual bonus
or long-term incentive if the Committee determines that the circumstances of the recruitment merit such alteration. The rationale will be
clearly explained.
The Committee may make an award in respect of hiring to ‘buy-out’ remuneration arrangements forfeited on leaving a previous
engagement. In doing so, the Committee will take account of relevant factors regarding the forfeited arrangements, which may include
any performance conditions attached to awards forfeited (and the likelihood of meeting those conditions), the time over which they
would have vested and the form of the awards (eg cash or shares). It will generally seek to structure buy-out awards on a comparable
basis to remuneration arrangements forfeited. These payments or awards are excluded from the maximum level of variable remuneration
referred to below. However, the Committee’s intention is that the value awarded would be no higher than the expected value of the
forfeited arrangements. Where considered appropriate, buy-out awards will be subject to forfeiture or clawback on early departure.
Where necessary, the Company will pay appropriate relocation, travel and subsistence costs. The Committee will seek to ensure that no
more is paid than is necessary.
The maximum level of variable remuneration (excluding buy-out awards), which may be awarded to a new Executive Director is 350% of
base salary.
Any share awards referred to in this section will be granted as far as possible under the Company’s ordinary share plans. If necessary,
and subject to the limits referred to above, to facilitate the awards mentioned above, the Committee may adopt a new arrangement in
accordance with the provisions of the UK Listing Rules, which allow for the grant of awards to facilitate, in unusual circumstances, the
recruitment of a Director.
Where a position is filled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be allowed to
continue according to the original terms.
Fees payable to a newly-appointed Chair or Non-Executive Director will be in line with the fee policy in place at the time of appointment.
73Strategic ReportOverview Governance Financial Statements
External directorships
The Company encourages Executive Directors to take up non-executive appointments, with the prior consent of the Company, in the
belief that such appointments broaden their skills and the contribution that they can make to the Company’s performance. Generally,
no more than one such appointment may be undertaken. There must be no conflict of interest and the time devoted to the external
appointment must be reasonable in relation to the individual’s commitment to the Company. Fees paid for external appointments may be
retained by the individual concerned.
Chair and other Non-Executive Directors
The Non-Executive Directors have letters of appointment. The Non-Executive Directors are appointed for initial three-year terms, which
thereafter may be extended. The appointment of any Non-Executive Director appointed or re-appointed after this Policy comes into
effect can be terminated by not less than three-months’ notice on either side, without compensation for loss of office. Non-Executive
Directors appointed prior to approval of this Policy will be transitioned onto three-months’ notice (from one-months’ notice) on re-
appointment. Each Non-Executive Director is subject to re-election at the AGM each year. For details of each Non-Executive Director’s
original appointment see page 86.
Remuneration Policy for Chair and Non-Executive Directors
Element Purpose
and link
to strategy
Operation Maximum
opportunity
Fees and
relevant
benefits
Attract and
retain high-
performing
individuals.
• Remuneration for Non-Executive Directors, other than the Chair, is determined
by the Board, following consultation between the Chair and the Chief Executive
Officer. The Chair’s fee is determined by the Committee and the CEO. Fees are
typically reviewed annually and any increase is usually effective from 1 April.
• Remuneration for Non-Executive Directors, other than the Chair, comprises
a basic annual fee for acting as Non-Executive Director of the Company and
additional fees for undertaking other roles such as the Senior Independent
Director, Chairing of Board Committees, and holding the position of Workforce
Engagement Director. Additional fees may also be paid for additional time
commitments.
• Overall fees will remain within the limit set out in the Company’s Articles of
Association or as otherwise approved by shareholders.
• The Chair and Non-Executive Directors do not participate in any variable pay or
share scheme arrangement, although their fees may be paid in cash or shares
(which may include a non-performance based nil or nominal cost award over
Company shares, which may incorporate a right to ‘dividend equivalents’ over
the award’s vesting period).
• May be entitled to benefits such as travel and subsistence and secretarial
support, or other benefits as appropriate. Reimbursed expenses may
include a gross-up to reflect any tax or social security due in respect of the
reimbursement.
N/A
Legacy arrangements
The Committee retains discretion to make any remuneration payment or payment for loss of office outside the Policy where the terms of
the payment were agreed before the Policy came into effect provided, in the case of a payment whose terms were agreed after 7 May
2014 (the date of approval of the Company’s first Directors’ Remuneration Policy) and before this Policy came into effect, the payment was
permitted under the Policy applying at the date the payment was agreed. For these purposes, ‘payment’ includes the satisfaction of awards
of variable remuneration and, in relation to an award over shares, the terms of the payment are agreed at the time the award is granted.
Consideration of employee views
There is no employee representation on the Committee. However, the Company liaises actively with employees through engagement
surveys, site visits, webinars and the employee forum, ‘Your Voice’. The Chief People and Sustainability Officer briefs the Board on
employees’ views and the Workforce Engagement Director is a member of the Committee, thus ensuring that the Committee’s decisions
are taken with appropriate insight to employees’ views.
Consideration of shareholder views
The Committee consulted with shareholders in relation to the development of this Policy as discussed in the Committee Chair’s
Statement on page 66. On an ongoing basis, the Committee considers shareholder feedback received in relation to the AGM each year
at a meeting following the AGM. This feedback, plus any additional feedback received during any meetings from time to time, is then
considered as part of the Company’s annual review of its Remuneration Policy.
When there are material issues relating to Executive remuneration or proposed changes in Policy, we engage actively with major
shareholders to ensure we understand the range of their views. When significant changes are made within the Policy, the Committee
Chair will inform shareholders of these.
Directors’ Remuneration Report continued
74
Costain Group PLC | Annual Report and Accounts 2025
Annual Report on Remuneration
The Annual Report on Remuneration set out on pages 75 to 88 provides details of how our existing Remuneration Policy was
implemented in the year ended 31 December 2025 and how we intend to apply the new Policy (see pages 68 to 74), subject to approval
by shareholders at the 2026 AGM, for the year ending 31 December 2026. This Annual Report on Remuneration will be subject to an
advisory vote at the 2026 AGM.
Governance of the Committee
The Remuneration Committee is comprised exclusively of Independent Non-Executive Directors. The members of the Committee,
together with their biographies, are shown on pages 42 and 43, and details of their attendance at Committee meetings is shown
below. The Committee is Chaired by Fiona MacAulay. The General Counsel and Company Secretary delegates to the Deputy Company
Secretary all company secretarial matters in relation to this Committee.
Committee members
Director Attendance
Fiona MacAulay 100%
Amanda Fisher 100%
Steve Mogford
1
66%
Tony Quinlan 100%
Terms of Reference and Committee activity
The Committee acts within its written Terms of Reference, which are reviewed regularly and published on the Company’s website at
www.costain.com.
The Committee met formally three times over the course of the year. The pie chart on page 62 and the annual statement from the
Committee Chair starting on page 65 set out how the Committee spent its time during the year.
Committee effectiveness review
As described on page 52, the Board Effectiveness Review was internally facilitated in 2025 and the Committee’s effectiveness was
considered as part of that review.
Advice provided to the Committee
Advice was sought, where appropriate, from a number of sources. During the course of the year, the Chief Executive Officer, the Chief
Financial Officer, the Board Chair and the Chief People and Sustainability Officer were invited to attend meetings of the Committee. No
individual was present when their own remuneration was being discussed.
To help the Committee in ensuring that the Company’s remuneration practices take due account of market and best practice, the
Committee has access to experienced specialist independent consultants. During the year, the Committee took advice from Deloitte LLP.
The Committee has authority to put the remuneration consultant function out to tender, or to review its services and fees, on a periodic
basis to ensure that the Committee continues to receive independent support and advice of a high standard. Deloitte LLP was appointed
in 2014 by the Committee following a competitive tender process to act as the Committee’s remuneration consultants. Deloitte LLP
received fees of £67,920 charged on a time and materials basis (2024: £33,174) for the year ended 31 December 2025 in respect of
services provided to the Committee. The Committee reviewed the effectiveness of Deloitte LLP in the year and confirmed that the advice
and support it received was appropriate.
Deloitte LLP is a founder signatory to the Remuneration Consulting Group’s Code of Conduct and is considered by the Committee to be
objective and independent, having regard to the other services provided by Deloitte LLP to the Group. During the year, Deloitte LLP also
provided advice to the Company in relation to the operation of the Company’s share plans and employment tax.
Voting on the remuneration matters
Votes received at the most recent AGM in respect of approval of the Annual Report on Remuneration and the Directors’ Remuneration
Policy are set out below:
Resolution Votes for % of votes cast Votes against % of votes cast Votes withheld
Annual Report on
Remuneration (2025 AGM)
122,038,548 89.03 15,034,382 10.97 246,042
Directors’ Remuneration
Policy (2023 AGM)
170,214,500 97.17 4,965,240 2.83 111,182
1
Steve Mogford was unable to attend the December Committee meeting
due to a prior commitment. He was provided with materials in advance
of the meeting and provided comments to the Chair in advance of the
meeting.
75Strategic ReportOverview Governance Financial Statements
Directors’ Remuneration Report continued
Single total figure of remuneration for each Director
This table and associated notes have been audited by PwC LLP.
2025
Fixed Variable
Salary
and fees
£
Taxable
benefits
£
Pension*
£
Subtotal
£
Annual
incentive
£
LTIP
#
£
Subtotal
£
Total
£
Executive Directors
Alex Vaughan 531,171 6,883 53,117 591,171 683,818 1,252,459 1,936,277 2,527,448
Helen Willis 439,544 14,945 43,954 498,443 565,196 1,040,064 1,605,260 2,103,703
Non-Executive Chair
Kate Rock 208,124 – – 208,124 – – – 208,124
Non-Executive Directors
Amanda Fisher 55,275 – – 55,275 – – – 55,275
Fiona MacAulay 65,948 – – 65,948 – – – 65,948
Steve Mogford 55,275 – – 55,275 – – – 55,275
Tony Quinlan 74,979 – – 74,979 – – – 74,979
2024
Fixed Variable
Salary
and fees
£
Taxable
benefits~
£
Pension**
£
Subtotal
£
Annual
incentive
£
LTIP
##
£
Subtotal
£
Total
£
Executive Directors
Alex Vaughan 503,975 3,891 50,397 558,263 688,460 1,155,081 1,843,541 2,401,804
Helen Willis 418,560 12,970 41,856 473,386 571,781 959,247 1,531,028 2,004,414
Non-Executive Chair
Kate Rock 200,850 – – 200,850 – – – 200,850
Non-Executive Directors
Bishoy Azmy
1
12,900 – – 12,900 – – – 12,900
Amanda Fisher 53,175 – – 53,175 – – – 53,175
Fiona MacAulay 63,475 – – 63,475 – – – 63,475
Steve Mogford 53,175 – – 53,175 – – – 53,175
Tony Quinlan 72,200 – – 72,200 – – – 72,200
* A pension contribution of £10,000 and £5,000 was paid into the Company’s Group Flexible Retirement Plan for Alex Vaughan and Helen Willis respectively and the balance
was paid to them directly as a taxable cash sum.
** A pension contribution of £11,145 and £5,000 was paid into the Company’s Group Flexible Retirement Plan for Alex Vaughan and Helen Willis respectively and the balance
was paid to them directly as a taxable cash sum.
#
2023 LTIP Award of 849,275 shares (Alex Vaughan) and 705,253 shares (Helen Willis) vested at 96.3%. Value calculated based on average share price over the three months
ended 31 December 2025 being 151.5p per share. Amounts include £13,234 and £10,990 for Alex Vaughan and Helen Willis respectively representing dividends paid and
accrued on their awards and which will be converted to shares on exercise. Of the total amount, amounts of £783,659 and £650,765 for Alex Vaughan and Helen Willis
respectively are attributable to the appreciation of the share price between the date of grant (55.2p) and the average share price over the three months ended 31 December
2025 (151.5p).
## 2022 LTIP award of 1,124,685 shares (Alex Vaughan) and 934,005 shares (Helen Willis) vested at 100%. Value calculated based on share price on vesting on 9 April 2025 being
98.5p per share. In accordance with the applicable regulations, the value included in the 2024 Directors’ Remuneration Report was based on the average share price over
the three months ended 31 December 2024 being 104.9p per share. Of the total amount, amounts of £708,581 and £588,447 for Alex Vaughan and Helen Willis respectively
are attributable to the appreciation of the share price between the date of grant (39.7p) and the date of vesting (98.5p).
~ 2024 taxable benefits restated to include travel expenses post the relocation of head office in August 2024.
1
Stepped down from the Board on 31 March 2024.
76 Costain Group PLC | Annual Report and Accounts 2025
Additional notes to the single total figure of remuneration
(a) Annual salaries for Executive Directors
The annual salaries with effect from 1 April 2025 were £536,328 for Alex Vaughan and £443,291 for Helen Willis.
(b) Taxable benefits provided to Executive Directors
The main benefits available to the Executive Directors during 2025, and their approximate values, were a car benefit of £2,077 (2024: £1,366)
for Alex Vaughan and car allowance of £10,500 (2024: £10,500) for Helen Willis, together with private medical insurance for Alex Vaughan
of £1,806 (2024: £1,525) and Helen Willis of £1,444 (2024: £1,220). They also each receive £3,000 towards travel expenses following the
change in location of the Company’s head office.
(c) Determination of the 2025 annual incentive
The maximum Annual Incentive Plan (AIP) opportunity for the Chief Executive Officer and the Chief Financial Officer for the year ended
31 December 2025 remained unchanged from previous years at 150% of base salary, with one-third of the earned AIP award to be
deferred into shares for a further two years, subject only to continued service in normal circumstances, and two-thirds of the earned AIP
award paid in cash.
The performance measures established by the Committee for the 2025 AIP continued to align with the Company’s strategy, while not
encouraging inappropriate business risks to be taken. These included inter alia a target maximum of £48.9m for Adjusted operating profit.
The achievement of the performance measures has been reviewed, with appropriate input from the Audit and Risk Committee, following
the end of the 2025 financial year. As shown in the table below, Alex Vaughan and Helen Willis both earned AIP awards equal to 85%,
respectively, of the maximum opportunity based on an assessment against the performance targets.
When determining the AIP outturn, the Committee considered whether the formulaic outcome was reflective of underlying business
performance. As discussed in the Annual Statement from the Remuneration Committee Chair, the Committee considered the
appropriateness of the payout on the cash metric and, recognising our strong cash flow performance for the year, exercised its
discretion to approve an additional 9% payout under this metric. Additionally, the payout on the Safety, Health & Environment metric at
5% (out of a possible 10%) reflects our actual performance of 7.5% (out of a possible 10%), with a reduction of 2.5% discretion applied by
the Remuneration Committee, to reflect the safety performance in the year.
In line with good practice, these outcomes were reviewed in the context of the broader stakeholder experience.
The Committee considered that the level of AIP awards made to Alex Vaughan and Helen Willis were a fair reflection of the Group’s
underlying financial performance achieved in 2025.
Performance measures
AIP
opportunity
– maximum
percentage
of bonus
AIP award
– as a
percentage
of bonus
AIP
opportunity
– maximum
percentage
of bonus
AIP award
– as a
percentage
of bonus AIP performance measure
Alex
Vaughan
Alex
Vaughan
Helen
Willis
Helen
Willis
Threshold
(0%)
Target
(60%)
Maximum
(100%)
Actual
performance
Alex
Vaughan
Helen
Willis
Adjusted operating
profit
(with 90% cash
conversion)
1, 2
40% 33% 40% 33% £43.1m £46.6m £48.9m £47.1m 49.5% 49.5%
Profit secured for
2026 15% 13% 15% 13% £71.4m £79.3m £87.2m £85.4m 19.5% 19.5%
Cash flow 15% 15% 15% 15% £142.7m £158.6m £174.5m £152.6m 22.5% 22.5%
Safety, health and
environment
10% 5% 10% 5% see commentary above 7.5% 7.5%
Strategic objectives
20% 19% 20% 19% see strategic objectives on page 78 28.5% 28.5%
Total 100% 85% 100% 85% 127.5% 127.5%
1
See definition on page 116. Target underpinned by 90% cash conversion.
2
For the Adjusted operating profit measure, there are intermediate vesting points with 80% and 90% vesting requiring Adjusted operating profit of £47.0m and £47.5m
respectively.
% payout of salary
77Strategic ReportOverview Governance Financial Statements
Directors’ Remuneration Report continued
Strategic objectives
Strategic objectives (previously called ‘Personal performance’) were based on progress towards delivery of the strategy and corporate
activities critical to the strategic transformation of the business, which were the personal responsibility of the Executive Directors. Details
of Alex Vaughan’s and Helen Willis’ performance against their objectives are set out below.
Alex Vaughan
Objective Achievement during the year Maximum Award
Broadened the scale of our market presence across all our sectors including:
• extending customer relationships (including Anglian Water, EDF, Babcock, Heathrow and TfL)
• extending existing programmes of work (eg National Highways, Sellafield, Southern Water,
Thames Water, United Utilities).
5% 5%
Continued leadership ensuring our services and programmes are predictable and best in class as
standard. In FY 25 we continued to drive improvements. Examples include: opening the M1 National
Emergency Area Retrofit North Programme ahead of schedule; a positive close to AMP7, with
our teams achieving 100% compliance with our customers’ regulatory date commitments across
over 100 projects; completing the demolition of the connector between Terminal 1 and Terminal 2
at Heathrow ahead of schedule; and delivering extensive upgrades to the dock infrastructure at
Devonport to the highest safety and environmental standards.
5% 4%
Growth in consultancy services, contributing 17% of FY 25 Group revenues (FY 24: 12%). Including
winning consultancy work with Department for Energy Security & Net Zero, National Highways on
the SPats3 Framework, Department for Transport and Manchester Airports Group. Winning design
commissions as part of our AMP8 water framework agreements and Network Rail professional
services framework agreement.
5% 5%
Retained Best Companies 1 Star accreditation as a ‘Very Good Company to work for’ in the 2025
engagement survey. Consistent increase in employee engagement over the past four years, up
2.9% on 2024.
Strategic leadership of our Sustainability programme, highlights include: the successful
implementation of our social value plan, creating over £1m in social value; a reduction in
environmental incidents, waste and water consumption; reduction in our carbon emissions;
progress in our equality, diversity and inclusion strategy (including an overall gender and ethnic
diversity and increase and reductions in our median gender and ethnicity pay gaps); and above
industry average scores in the Considerate Constructors Scheme.
5% 5%
20% 19%
Helen Willis
Objective Achievement during the year Maximum Award
Strategic leadership driving continual improvements in and the embedment of rigorous risk
management and commercial control throughout our operations including contract selection
processes and commercial and operational assurance.
Strategic oversight of improvements to systems and processes, including our digitalisation
strategy.
Continued improvements in our supply chain management processes including stregthening our
approach to supplier relationship management to ensure we have capacity and capability to
deliver predictable outcomes for our customers; active engagement, providing insight into areas
such as sustainable procurement and production thinking; and investment in upskill programmes
through the Supply Chain Sustainability School in addition to internal expertise in areas such as
health and safety, carbon, modern slavery and sustainable procurement.
10% 9%
Retained Best Companies 1 Star accreditation as a ‘Very Good Company to work for’ in the 2025
engagement survey. Consistent increase in employee engagement over the past four years, up
2.9% on 2024.
Continued leadership driving our Sustainability programme including:
• active sponsorship of the Company’s inclusion agenda including active contribution and support
to our networks and Empower Programme.
• refreshed our sustainable procurement and supply chain policy, positioning sustainable
procurement as a strategic enabler.
• improvements to data collection with the embedment of our Environmental Construction Data
Tracker.
5% 5%
Successfully negotiated terms with trustee of the defined benefit pension scheme resulting in
significant returns of capital.
5% 5%
20% 19%
78 Costain Group PLC | Annual Report and Accounts 2025
(d) Vesting of the April 2023 LTIP award
The LTIP awards granted on 6 April 2023 to Alex Vaughan and Helen Willis were based on aggregate Adjusted EPS, TSR and ESG for the
three years ended 31 December 2025. In line with the 2024 UK Corporate Governance Code requirements, the Committee confirms that
there was no application of the recovery provisions in the reporting period.
Performance against the measures and the resulting vesting outcome is shown below. Aggregate Adjusted EPS for the three financial
years (relating to 50% of the award), calculated on an adjusted basis approved by the Committee, was 39.0 pence as a result of which,
this element of the LTIP awards is due to vest at 100%. Total shareholder return (TSR) growth (relating to 25% of the award) was achieved
to the full extent. The environmental performance condition (relating to 15% of the award) and the gender diversity performance condition
(relating to 5% of the award) were also achieved in full. The ethnic diversity performance condition (relating to 5% of the award) achieved
the threshold metric. Therefore, the 2023 LTIP is due to vest at 96.3%.
The award vests in April 2026 but is subject to a further holding period of two years following the end of the performance period, thereby
ensuring long-term alignment of the Executive Directors’ and shareholders’ interests.
Performance measure Weighting Threshold
(25% vesting)
Maximum
(100% vesting)
Actual performance Vesting outcome
Adjusted EPS
1
50% 30.6p 35.6p 39.0p 100%
(Outturn: 50%)
TSR performance
2
25% 50% 100% 312% 100%
(Outturn: 25%)
ESG — reduction in Scope 1 and
2 carbon emissions compared to
2021 baseline
15% 16.2% 19.8% 58% 100%
(Outturn: 15%)
ESG — improvement in AIP
population gender diversity
5% 36% 39% 42% 100%
(Outturn: 5%)
ESG — improvement in AIP
population ethnic diversity
5% 6% 9% 6% 25%
(Outturn: 1.3%)
1
Aggregate Adjusted EPS over the financial years ending 31 December 2023, 2024 and 2025. For the purposes of the LTIP, Adjusted EPS is further adjusted by the Committee to
exclude pension interest to ensure that the performance measures are assessed on a consistent basis year to year. For definition see page 116.
2
TSR performance is based on a one-month average prior to the start of the performance period and at the end of the performance period.
(e) Pensions and life assurance
Alex Vaughan’s and Helen Willis’ pension provision is equal to 10% of salary and life assurance cover of four times’ base salary is provided
through the Costain Life Assurance Scheme, both in line with the wider workforce.
The Group offers a Group Flexible Retirement Plan. Alex Vaughan was a participant of this Scheme until 31 May 2022 and then rejoined
(capped) from May 2023. Helen Willis has been a participant (also capped) since August 2023.
(f) Chair
Kate Rock’s annual fee was reviewed during 2025 and was increased from £202,800 to £209,900 with effect from 1 April 2025 (a 3.5%
increase, in line with the average salary increase for the wider workforce).
(g) Non-Executive Directors
Remuneration for Non-Executive Directors, other than the Chair, comprises a basic annual fee for acting as a Non-Executive Director of
the Company and additional fees for the Senior Independent Director and Chairing Board Committees. In 2025, Non-Executive Directors’
fees were increased by 3.5% in line with the average salary increase for the wider workforce. The annual fees set with effect from 1 April
2025 were as follows:
2025 fees Basic fee
Senior
Independent
Director
Audit and Risk
Committee Chair
Remuneration
Committee Chair
Fees £55,580 £9,108 £10,764 £10,764
79Strategic ReportOverview Governance Financial Statements
Directors’ Remuneration Report continued
Grants made during the year
These tables and the associated footnotes have been audited by PwC LLP.
2025 LTIP grant
Grants were made under the LTIP on 9 April 2025 to Alex Vaughan, Helen Willis and other members of the senior leadership team. The
grant level for the Executive Directors was at 100% of salary.
The award vests after three years, subject to continued service and the achievement of performance measures (as set out below) but
cannot be exercised until after five years, thereby ensuring long-term alignment of the Executive Directors’ and shareholders’ interests.
Performance measures for the 2025 LTIP are as follows:
Performance measure Weighting Threshold (25% vesting) Maximum (100% vesting)
Adjusted EPS
1
50% 38.8p 45.9p
TSR performance
2
25% 50% 100%
ESG – reduction in water pollution environmental incident rate
3
15% 40% 50%
ESG – improvement in wider leadership
4
gender diversity 5% 27% 33%
ESG – improvement in wider leadership
4
ethnic diversity 5% 16% 20%
1
Aggregate Adjusted EPS over the financial years ending 31 December 2025, 2026 and 2027. The Committee believes that Adjusted EPS remains an appropriate metric to use
under the LTIP, as growth in Adjusted EPS is one of the key drivers of the Company’s share price. As with previous LTIP awards, Adjusted EPS shall be further adjusted by the
Committee to exclude pension interest to ensure that the performance measures are assessed on a consistent basis year to year. For definition see page 116.
2
TSR growth over the financial years ending 31 December 2025, 2026 and 2027. The Committee believes that the use of a TSR element in the LTIP provides a clear alignment
of Executive Directors’ interests with value created for shareholders and reflects the importance of execution of the business’ strategy translating to increases in our share
price. For these purposes TSR will be based on a one-month average prior to the start of the performance period and at the end of the performance period.
³ Measured compared to 2024 baseline.
4
Employee bands D—F, which is a wider population of management below the Executive Board and senior management level than for the 2024 LTIP grant.
The Committee has the discretionary power to vary these targets should circumstances change such that the original targets are no
longer considered appropriate (eg in the case of a material acquisition or divestment in the Group or other material transaction).
A clawback and malus provision is incorporated in the AIP and the LTIP with regard to any material misstatement to audited accounts,
an error in calculation of targets resulting in an overpayment, gross misconduct or criminal behaviour on the part of a participant,
reputational damage or serious corporate failure.
The Committee also has the ability to exercise discretion to make adjustments to the formulaic vesting outcome if it is not considered to
be appropriate taking into account business performance during the performance period.
The share awards granted under the 2025 LTIP, structured as options with a nil exercise price, are as follows:
Type of award Number of shares Face value
1
End of performance period Threshold vesting
Alex Vaughan Nil cost option 535,970 £536,328 31 December 2028 25%
Helen Willis Nil cost option 442,995 £443,291 31 December 2028 25%
1
Valued using the mid-market closing share price on the three business days prior to the date of grant (4, 7 and 8 April 2025), being 100.1 pence.
2025 SDP grant
The Company granted awards under the SDP to the Executive Directors on 9 April 2025, details of which are shown on page 88.
All-employee share plan
During 2025, the Company invited employees to participate in the Save As You Earn (SAYE) Scheme, which is open to all employees
on the same basis. SAYE Scheme awards were granted to the Executive Directors during 2025 as set out on page 88.
Exit payments made during the year and payments made to past Directors
This section has been audited by PwC LLP.
No Executive Directors departed in 2025 and no payments have been made to past Directors.
80 Costain Group PLC | Annual Report and Accounts 2025
Implementation of Policy in the year to 31 December 2026
Salary
As set out in the Committee Chair’s Statement, the Chief Executive Officer will receive a salary increase in 2026 of 3.5%, in line with the
average salary increase for the wider workforce. The Chief Financial Officer will receive a salary increase of 5% (effective from 1 April
2026) in recognition of the scope of her responsibilities which have continued to expand since 2024, including the increased remit of the
internal IT and Risk functions.
Salary 2026 Salary 2025 % change
Alex Vaughan £555,099 £536,328 3.5%
Helen Willis £465,456 £443,291 5%
Chair’s fee
Taking into account the scope of the role, responsibilities, time commitments, and relevant market data, the Chair’s basic annual fee will
be increased in 2026 from £209,898 to £250,000 per annum. The Chair is generally expected to use a proportion of the fees paid during
the year (net of tax) to purchase shares.
Non-Executive Director fees
The Board (comprising the Executive Directors and the Chair) agreed fees of £6,250 for both the Workforce Engagement Director and
the Sustainability Committee Chair (with effect from 1 April 2026) to reflect the time involved to fulfil the roles. The Workforce Engagement
Director fee had previously been agreed as £5,000 for the period 1 January to end of March 2026. With effect from 1 April 2026, the
following fee increases will also be implemented to align the Non-Executive Director fees more closely with the market-competitive range
for companies of a similar scale and complexity
• The Non-Executive Director base fee will increase to £62,500 (2025: £55,580).
• The fees for the Audit and Risk Committe Chair and the Remuneration Committee Chair will increase to £12,500 (2025: £10,764) and the
Senior Independent Director will increase to £12,500 (2025: £9,108).
Non-Executive Directors are generally expected to use a proportion of the base fees paid during the year (net of tax) to purchase shares.
2026 fees Basic fee
Senior
Independent
Director
Audit and Risk
Committee Chair
Remuneration
Committee Chair
Sustainability
Committee Chair
Workforce
Engagement
Director
Fees £62,500 £12,500 £12,500 £12,500 £6,250 £6,250
2026 Annual Incentive Plan
Executive Directors and certain members of the wider senior leadership team are eligible for annual bonuses under the AIP to encourage
improved performance, with targets established by the Committee to align rewards with the Company strategy. The targets are clearly
aligned with the delivery of our strategy. Their achievement will be reviewed, with appropriate input from the Audit and Risk Committee,
at the end of the year.
The maximum AIP opportunity for the Chief Executive Officer and the Chief Financial Officer for the year ending 31 December 2026 will
remain unchanged from previous years at 150% of base salary, with one-third of earned AIP deferred into shares for a further two years,
to be awarded under the SDP, and two-thirds of earned AIP paid in cash.
The performance measures for the 2026 AIP are as detailed below:
Performance measures
2026 AIP opportunity –
maximum percentage of bonus
Chief Executive Officer Chief Financial Officer
Adjusted operating profit (with 90% cash conversion) 45% 45%
Profit secured for 2027 15% 15%
Cash flow 15% 15%
Safety, health and environment 10% 10%
Strategic objectives 15% 15%
Total 100% 100%
The Committee has chosen not to disclose in advance the details of the performance targets for the year ending 31 December 2026, as
these include items that the Committee considers commercially sensitive. The Committee will continue to provide retrospective disclosure
of such performance targets in next year’s Annual Report on Remuneration to the extent the Committee determines these targets are
not commercially sensitive.
81Strategic ReportOverview Governance Financial Statements
2026 LTIP grant
The grant level for the Executive Directors will be up to 125% of salary. It is expected the LTIP awards will be granted following the 2026
AGM. The LTIP award will be subject to the achievement of performance measures unchanged from 2025 as set out below. LTIP shares,
which vest after three years, will be subject to a further holding period of two years following the end of the performance period, thereby
ensuring long term alignment of the Executive Directors’ and shareholders’ interests. The proposed targets are set out below.
Adjusted EPS performance measure (50% of the LTIP)
Aggregate Adjusted EPS over the financial years ending 31 December 2026, 2027 and 2028
Vesting level for awards
(as a % of maximum)
Below 46.3 pence 0%
46.3 pence 25%
Between 46.3 pence and 54.8 pence 26%–100% pro-rata
54.8 pence or more 100%
The Committee believes that Adjusted EPS remains an appropriate metric to use under the LTIP, as growth in Adjusted EPS is one of
the key drivers of the Company’s share price. As with previous LTIP awards, Adjusted EPS shall be further adjusted by the Committee
to exclude pension interest to ensure that the performance measures are assessed on a consistent basis year to year (see page 116 for
definition). When setting the EPS targets, the Committee considered a range of factors including internal and external forecasts, market
conditions and the impact of other relevant factors including bank interest and tax rates. The Committee considers the proposed targets
to be appropriately stretching.
TSR performance measure (25% of the LTIP)
TSR growth over the financial years ending 31 December 2026, 2027 and 2028
Vesting level for awards
(as a % of maximum)
Less than 50% 0%
50% 25%
More than 50% but less than 100% 26%–100% pro-rata
100% or more 100%
The Committee believes that the use of a TSR element in the LTIP provides a clear alignment of Executive Directors’ interests with
value created for shareholders and reflects the importance of execution of the business’ strategy translating to increases in our share
price. For these purposes, TSR will be based on a one-month average prior to the start of the performance period and at the end of the
performance period.
ESG performance measures (25% of the LTIP)
Environmental: Reduction in water pollution environmental incident rate compared to 2024 baseline (15% weighting)
Vesting level for awards
(as a % of maximum)
Below 50% 0%
50% 25%
Between 50% and 60% 26%–100% pro-rata
60% or more 100%
Social: Equality, diversity and inclusion (EDI)
Improvement in wider leadership
1
gender diversity (5% weighting)
Vesting level for awards
(as a % of maximum)
Below 27% 0%
27% 25%
Between 27% and 33% 26%–100% pro-rata
33% or more 100%
Improvement in wider leadership
1
ethnic diversity (5% weighting)
Vesting level for awards
(as a % of maximum)
Below 16% 0%
16% 25%
Between 16% and 20% 26%–100% pro-rata
20% or more 100%
1
Employee bands D - F, which is the same population of management as the 2025 LTIP grant
Directors’ Remuneration Report continued
82
Costain Group PLC | Annual Report and Accounts 2025
The Committee has the ability to adjust the targets in appropriate circumstances, for example, in the case of a material acqusition or
divestment or other material transaction. This is to ensure that performance is measured on a fair and consistent basis and to ensure that
the targets are not materially less or more difficult to satisfy.
A clawback and malus provision is incorporated in the AIP and the LTIP with regard to any material misstatement to audited accounts,
an error in calculation of targets resulting in an overpayment, gross misconduct or criminal behaviour on the part of a participant,
reputational damage or serious corporate failure.
Other information
Performance graph
The graph to the below left shows the value, to 31 December 2025, of £100 invested in Costain Group PLC on 1 January 2016 compared
with the value of £100 invested in the FTSE SmallCap Index. The Committee believes that the FTSE SmallCap Index is the most
appropriate index to use as it is the index in which the Company was a constituent during the performance period and comprises
companies of a similar size to Costain at that time. Additionally, the graph to the below right shows the value, to 31 December 2025, of
£100 invested in Costain Group PLC on 1 January 2021 compared with the value of £100 invested in the FTSE SmallCap Index. Over the
past five years since the successful capital raise in 2020, the management team have delivered growth in value and outperformance of
the FTSE SmallCap index.
300
250
200
150
100
50
0
01
Jan
2021
31
Dec
2021
31
Dec
2022
31
Dec
2023
31
Dec
2024
31
Dec
2025
300
250
200
150
100
50
0
01
Jan
2016
31
Dec
2016
31
Dec
2017
31
Dec
2018
31
Dec
2019
31
Dec
2020
31
Dec
2021
31
Dec
2022
31
Dec
2023
31
Dec
2024
31
Dec
2025
FTSE SmallCap Index
Costain Group PLC
83Strategic ReportOverview Gove rna n ce Financial Statements
Change in Chief Executive Officer’s remuneration
2016 2017 2018 2019
1
2020 2021 2022 2023 2024
2
2025
Chief Executive
Officer AW AW AW AW/AV AV AV AV AV AV AV
Total
remuneration £1,089,943 £1,707,094 £1,560,601 £524,169 £447,710 £980,793 £1,146,715 £1,358,611 £2,401,804 £2,527,448
AIP (%) 75.4% 81% 62.5% Nil Nil 73% 72% 77.8% 89% 85%
LTIP vesting (%) Nil 79.1% 100 Nil Nil 25% 81.1% 74.5% 98% 96.3%
1
Andrew Wyllie (AW) stepped down from the Board on 7 May 2019 and Alex Vaughan (AV) was appointed to the Board on 7 May 2019. Total remuneration in 2019 for Andrew Wylie
was £211,927 and for Alex Vaughan was £312,242.
2
The total remuneration figure in this column has been restated, compared to the estimated values included in the 2024 Annual Report, to reflect the Company’s share price on
the vesting date for the 2022 LTIP award on 9 April 2025 of 98.50p.
CEO pay ratio
The table below shows, for 2019 to 2025, the ratio of the pay of the CEO to that of the best full-time equivalent lower quartile, median and
upper quartile employee within the Group.
Year Methodology used
25th Percentile
Pay Ratio
50th Percentile
Pay Ratio
75th Percentile
Pay Ratio
2025 Option B 54:1 39:1 30:1
Total pay and benefits £47,165 £64,166 £83,875
Salary component £42,888 £61,153 £77,441
2024 Option B 48:1 34:1 26:1
2023 Option B 35:1 19:1 15:1
2022 Option B 23:1 19:1 14:1
2021 Option B 22:1 17:1 13:1
2020 Option B 13:1 8:1 6:1
2019
1
Option B 17:1 10:1 7:1
1
The Single Total Figure of Remuneration for the CEO has been calculated as the total remuneration paid to Andrew Wyllie for the period 1 January 2019 to 7 May 2019 plus the
total remuneration paid to Alex Vaughan for the period 8 May 2019 to 31 December 2019.
We have chosen to use Option B of the available methodologies to calculate the ratio. This methodology is based on the data collected
as part of the latest gender pay reporting and the calculations were performed as at the final day of the relevant financial year. Option B
was selected on the basis that it is an efficient and robust approach, recognising that the data required to calculate the ratio comes from
multiple sources. Analysis has been performed to ensure that the lower quartile, median and upper quartile employees are reasonably
representative.
The UK employee percentile pay and benefits has been calculated based on the amount paid or receivable for the relevant financial year.
The calculations are on the same basis as required for the CEO’s remuneration for single total figure purposes.
A high proportion of the CEO’s total reward is performance-related and delivered in shares. The ratios will therefore depend significantly on
the CEO’s variable pay outcomes and may fluctuate year to year. The movement in ratios from 2024 to 2025 reflects the strong outturns
under the AIP and LTIP, driven by Company performance, with the increased value delivered under the LTIP reflecting growth in share price
over the performance period. It is also influenced by the CEO’s pay increase for 2025, the second and last phase of a stepped increase,
which was slightly above the workforce average.
The Board believes that the median pay ratio is consistent with the Group’s wider policies on pay, reward and progression.
Directors’ Remuneration Report continued
84
Costain Group PLC | Annual Report and Accounts 2025
Annual percentage change in remuneration of Directors compared to all employees
The table below shows the annual percentage change in each Director’s remuneration compared to the average employee remuneration.
Further information in relation to the 2024—25 changes is set out below the table. Information relating to the changes between previous
years is included in the relevant Directors’ Remuneration Reports.
Average
employee
1
Executive Directors
Non-
Executive
Chair Non-Executive Directors
Alex Vaughan
Helen
Willis
Kate
Rock
Amanda
Fisher
Fiona
MacAulay
Steve
Mogford Tony Quinlan
Salary/fees
2
2024–2025 6.0 5.4 5.0 3.6 3.9 3.9 3.9 3.8
2023–2024 5.6 8.8 8.8 3 N/A 5 N/A 4
2022–2023 6.6 4.5 4.5 N/A N/A N/A N/A 5.2
2021–2022 3.6 3 2 N/A N/A N/A N/A N/A
2020–2021 5 10 N/A N/A N/A N/A N/A N/A
Taxable benefits
3
2024–2025 (4.6) 76.9
4
15.2
4
N/A N/A N/A N/A N/A
2023–2024 (23) 36.9
5
10
5
N/A N/A N/A N/A N/A
2022–2023 0.0 4.7 3.1 N/A N/A N/A N/A N/A
2021–2022 0.2 (80) 1 N/A N/A N/A N/A N/A
2020–2021 (6) (16) N/A N/A N/A N/A N/A N/A
Annual Bonus
6
2024—2025 4.9 (0.7) (1.2) N/A N/A N/A N/A N/A
2023–2024 12 25.8
25.8 N/A N/A N/A N/A N/A
2022–2023 55.8 13.5 13.4 N/A N/A N/A N/A N/A
2021–2022 (7) 2 2 N/A N/A N/A N/A N/A
2020–2021 236 N/A N/A N/A N/A N/A N/A N/A
1
The percentage change in each element of employee remuneration is based on all monthly paid UK employees across the Group. This population has been selected as no
employees are directly employed by the listed parent entity.
2
Average salary for employees is calculated based on the annual monthly UK salary bill divided by the average number of monthly paid UK employees.
3
Employee benefits are calculated based on the total cost to the Company of private medical insurance, company cars and car allowances, averaged per head for monthly
paid employees.
4
Reflects an increase in car benefit for Alex Vaughan, increased costs associated with the private medical insurance and travel allowance post the change in location of head
office. Please see page 77 for more information.
5
Updated to reflect the restated taxable benefits received in 2024 (see the notes to the single figure table on page 76 for more information).
6
Bonus figures are calculated on the total bonus payments made to monthly employees divided by the average number of monthly paid employees.
85Strategic ReportOverview Governance Financial Statements
Relative importance of spend on pay
The table below illustrates the change in expenditure by the Company on remuneration paid to all the employees of the Group and
distributions to shareholders from the financial year ended 31 December 2024 to the financial year ended 31 December 2025.
2025
£m
2024
£m
%
change
Overall expenditure on pay 235.8 233.3 1.07
Dividends and share buybacks 17.9 13.3 34.59
These matters were selected to be shown as they represent key distributions by the Group to its stakeholders.
Directors’ appointments
The Executive Directors have service contracts that can be terminated by either party on the giving of 12-months’ notice.
The Non-Executive Directors have letters of appointment. The Independent Non-Executive Directors are appointed for initial three-year
terms, which thereafter, may be extended. The appointment of a Non-Executive Director can be terminated by not less than one month’s
notice on either side, with three months for the Chair. Each Non-Executive Director is subject to re-election at the AGM each year.
The dates of each Director’s original appointment and expiry of current term are as follows:
Director
Date of original
appointment
Effective date of latest
appointment letter Expiry of current term
1,2
Termination period
1
Alex Vaughan 7 May 2019 7 May 2019 Terminable on 12 months’ notice
Helen Willis 30 November 2020 30 November 2020 Terminable on 12 months’ notice
Kate Rock 1 November 2022 1 November 2025 1 November 2028 3 months
Amanda Fisher 1 December 2023 1 December 2023 1 December 2026 1 month
Fiona MacAulay 6 April 2022 6 April 2025 6 April 2028 3 months
Steve Mogford 1 November 2023 1 November 2023 1 November 2026 1 month
Tony Quinlan 1 February 2021 1 February 2024 1 February 2027 1 month
1
The appointment of a Non-Executive Director may be terminated by reasonable notice on either side. During 2025, it was agreed that Non-Executive Directors should move
to a three-month termination period. This will be updated as current terms are renewed.
2
In accordance with the 2024 UK Corporate Governance Codes, all the Directors are required to seek election or re-election.
External directorships
Neither of the Executive Directors held external directorships in the year.
Directors’ Remuneration Report continued
86
Costain Group PLC | Annual Report and Accounts 2025
The following tables and the associated footnotes have been audited by PwC LLP.
Share awards under the Long-Term Incentive Plan (LTIP)
Details of the Executive Directors’ participation in the LTIP are as follows:
Director Date granted
a
Balance at
1 January
2025
b
Granted
during
year
Share price
at date of
grant (p)
Vested
during
year
Lapsed
during
year
Exercised
during the
year
Market
price at
date of
exercise
(p)
c
Average
market
price
(p)
d
Value of
shares at
date of sale/
retention of
balance
e
(£)
Balance
at 31
December
2025
Actual/
expected
vesting/
release date
Alex
Vaughan
07.05.19* 36,787 - 325 - - - - - - 36,787 May-24
07.10.20** 455,924 - 42.2 - - 455,924 144 142 347,960 - Apr-25
08.04.21 529,438 - 61.0 - - - - - - 529,438 Apr-26
06.04.22 1,124,685 - 39.7 1,124,685 - - - - - 1,124,685 Apr-27
06.04.23
1
849,275
- 55.2 - - - - - - 849,275 Apr-28
09.04.24
2
743,798 - 77.4 - - - - - - 743,798 Apr-29
09.04.25
3
- 535,970 100.1 - - - - - - 535,970 Apr-30
Helen
Willis
30.11.20** 212,940 - 53.7 - - 212,940 144 142 162,516 - Apr-25
08.04.21
439,671 - 61.0 - - - - - - 439,671 Apr-26
06.04.22 934,005 - 39.7 934,005 - - - - - 934,005 Apr-27
06.04.23
1
705,253 - 55.2 - - - - - - 705,253 Apr-28
09.04.24
2
630,878 - 77.4 - - - - - - 630,878 Apr-29
09.04.25
3
- 442,995 100.1 - - - - - - 442,995 Apr-30
a Details of the performance conditions, as applicable, for these awards and performance against these conditions are set out in the relevant Directors’ Remuneration Reports
for prior years.
b Subject to note 3 below, awards under the LTIP are structured as options with a nil cost exercise price. 2019 awards were adjusted for the capital raising using the
adjustment factor of 1.0625.
c Price achieved for sale of balance of awards sold post those sold to cover tax and national insurance contributions.
d Price used to determine the number of shares sold to cover tax and national insurance contributions.
e Value calculated using the Market price at date of exercise excludng shares deducted to settle tax and national insurance contributions.
1 Details of the performance conditions for the 2023 LTIP and performance against these conditions are on page 79.
2 Of the total number of shares awarded under the 2024 LTIP both Alex Vaughan and Helen Willis received 77,519 shares as a tax qualifying market value option as part of a
‘Qualifying LTIP’ with an option price of 77.4 pence. These shares are subject to the same performance conditions as the ‘ordinary LTIP’ award. These tax qualifying options
are linked to the nil cost option such that, at the time of exercise, to the extent that there is a gain in the tax qualifying option, the nil cost option will be forfeited to the value
of that gain.
3 Details of the performance conditions for the 2025 LTIP are on page 80.
* Alex Vaughan received a further 2,052 dividend equivalent of shares over his 2019 LTIP award of 34,735 shares, which he will receive on exercise of his award.
** Alex Vaughan received a further 6,704 dividend equivalent of shares over his 2020 LTIP award of 449,220 shares, which he received on exercise of his award.
Helen Willis received a further 3,131 dividend equivalent of shares over her 2020 LTIP award of 209,809 shares, which she received on exercise of her award.
At 31 December 2025, the derived mid-market price of the ordinary shares in the Company, as advised by the Company’s brokers was
159.6 pence. The range of the closing share price of an ordinary share during 2025 was 86.0 pence to 170.0 pence.
87Strategic ReportOverview Governance Financial Statements
Share awards under the Share Deferral Plan (SDP)
Details of the Executive Directors’ participation in the SDP are as follows overleaf:
Director
Date
granted
Balance at
1 January
2025
Granted
during year
1
Share price
at date
of grant
(pence)
Vested
during the
year
Exercised
during
the year
Lapsed
during
year
Market
price at
date of
exercise
(p)
2
Average
market
price
(p)
3
Value of
shares at
date of sale/
retention of
balance
4
(£)
Balance at
31 December
2025
1
Actual/
expected
vesting/
release date
Alex
Vaughan
06.04.23 291,195 – 55.2 291,195 291,195 – 144.0 142.0 225,819 – April 2025
09.04.24 235,611 – 77.4 – – – – – – 235,611 April 2026
09.04.25 – 229,333 100.1 – – – – – – 229,333 April 2027
Helen
Willis
06.04.23 241,826 – 55.2 241,826 241,826 – 144.0 142.0 187,534 – April 2025
09.04.24 195,656 – 77.4 – – – – – – 195,656 April 2026
09.04.25 – 190,466 100.1 – – – – – – 190,466 April 2027
1
Awards under the SDP are structured as options with a nil cost exercise price.
2
Price achieved for sale of balance of awards sold post those sold to cover tax and national insurance contributions.
3
Price used to determine the number of shares sold to cover tax and national insurance contributions.
4
Value calculated using the Market price at date of exercise excludng shares deducted to settle tax and national insurance contributions.
Share options under the SAYE Scheme (Sharesave)
Details of the Executive Directors’ SAYE Scheme options are as follows:
Director
Date
granted
Balance at
1 January
2024
Granted
during
year
Exercise
price
(pence)
1
Exercised
during
year
Lapsed
during
year
Market
price at
date of
exercise
Market
price at
date of
retention
Value of
shares at
date of
retention
Balance
at 31
December
2024
Exercised/ exercisable
from/to
Alex
Vaughan
19.10.2023 6,974 – 50.0 – – – – – 6,974 Dec 2026–Jun 2027
11.10.2024 4,568 – 81.2 – – – – – 4,568 Dec 2027–Jun 2028
10.10.2025 – 3,578 102.0 – – – – – 3,578 Dec 2028–Jun 2029
Helen
Willis
19.10.2023 6,974 – 50.0 – – – – – 6,974 Dec 2026–Jun 2027
11.10.2024 4,568 – 81.2 – – – – – 4,568 Dec 2027–Jun 2028
10.10.2025 – 3,578 102.0 – – – – – 3,578 Dec 2028–Jun 2029
1
The exercise price is determined as 80% of the average of the closing mid-market share price on the three business days prior to the invitation to employees to participate in
the SAYE Scheme, subject to not being lower than the nominal value of a share.
No Executive Director exercised a SAYE Scheme share option in 2025 and, therefore, there was no gain on exercise. The Company
granted no options under the SAYE Scheme in 2020, 2021 or 2022.
Directors’ shareholdings
The Executive Directors are expected to build and maintain a shareholding of not less than 200% of base annual salary through the
retention of vested share awards or through open market purchases. Non-Executive Directors are not expected to build and maintain a
shareholding. Details of the Directors’ share interests in the Company as at 31 December 2025 are as set out below. There have been no
changes in shareholdings between 31 December 2025 and the date of signing of the report.
Director
Beneficially
owned
1
Outstanding
SDP awards
2
Outstanding
Vested LTIP
awards
3
Outstanding
SAYE Scheme
awards
4
Shareholding
guidelines (% of
salary/ fee)
Actual
shareholding as
at 31.12.25 (% of
salary/fee)
5, 6
Alex Vaughan 570,737 464,944 1,690,910 15,120 200% 510%
Helen Willis 253,793 386,122 1,373,676 15,120 200% 427%
Kate Rock 125,000 – – – N/A N/A
Amanda Fisher 10,000 – – – N/A N/A
Fiona MacAulay 6,347 – – – N/A N/A
Steve Mogford – – – – N/A N/A
Tony Quinlan 25,000 – – – N/A N/A
1
Including shares held by persons closely associated.
2
Balance of SDP awards net of shares sold to cover tax and national insurance.
3
Balance of vested but unexercised LTIP awards net of shares sold to cover tax and national insurance.
4
Not included in the total actual shareholding as shares not yet vested.
5
Calculated by reference to the mid-market share price of £1.596 on 31 December 2025.
6
In calculating the number of shares which count for the determination of the extent to which directors meet the shareholding guidelines, additional shares in respect of the
dividend payable on vested but unexercised LTIP awards have been included and a reduction made in respect of anticipated tax and national insurance, which would be
payable on exercise of both SDP and LTIP awards.
By order of the Board
Fiona MacAulay
Committee Chair
9 March 2026
Directors’ Remuneration Report continued
88
Costain Group PLC | Annual Report and Accounts 2025
Directors’ Report
The Governance Report on pages 42 to 90 and the Strategic
Report on pages 4 to 41 (and in particular pages 18 to 31 and 53),
with regard to information about employee involvement, diversity,
cyber security, greenhouse gas emissions and measures in
relation to increasing the Company’s energy efficiency) are also
incorporated into this report by reference.
The Company has chosen to include the disclosure of likely future
developments of the Company’s business in the Strategic Report.
Climate-related disclosures consistent with the Task Force on
Climate-related Financial Disclosures (TCFD) Recommendations
and TCFD Recommended Disclosures can be found on pages 24
to 31.
Annual General Meeting (AGM)
The Company’s 2025 AGM will be held on Thursday 14 May
2026. The Notice of AGM accompanies this Annual Report and is
available on our website, www.costain.com.
Profit, dividend payments and dividend policy
The profit after tax for the financial year ended 31 December 2025
was £37.3m (2024: £30.6m). An interim dividend of 1 pence per
ordinary share was paid on 17 October 2025 (2024: 0.4 pence paid
on 18 October 2024). Subject to approval at the 2026 AGM, a final
dividend of 3.2 pence for the year ended 31 December 2025 will
be paid on 26 May 2026 (2024: 2.0 pence paid on 29 May 2025) to
shareholders on the register of members at close of business on
17 April 2026. The total dividend paid for the year will, therefore, be
4.2 pence per ordinary share (2024: 2.4 pence).
Dividends and other distributions
The Company may, by ordinary resolution, from time to time,
declare dividends not exceeding the amount recommended by
the Board. Subject to the Companies Act 2006, the Board may
pay interim dividends, and also any fixed-rate dividend, whenever
the financial position of the Company, in the opinion of the Board,
justifies its payment.
If the Directors act in good faith, they are not liable for any loss
that shareholders may suffer because a lawful dividend has been
paid on other shares, which rank equally with, or behind, their
shares.
The Board may withhold payment of all or any part of any
dividends or other monies payable in respect of the Company’s
shares from a person with a 0.25% or more interest in a class of
the Company’s shares, if such a person has been served with
a restriction notice after failure to provide the Company with
information concerning interests in those shares required to be
provided under the Companies Act 2006.
Share capital
The issued share capital of the Company as at 31 December 2025
was £2,667,148.95, consisting of 266,714,895 ordinary shares of
£0.01 each. Further details of the share capital of the Company
can be found in note 22 on page 148.
Further to approval at the 2025 AGM, and as announced on
16 June 2025, the Company began a £10m on-market share
buyback programme on 19 June 2025. Shares were purchased by
Investec Bank PLC from commencement until 25 July 2025 and
then by Panmure Liberum Limited until completion on
15 August 2025. A total of 6,395,100 shares were purchased and
subsequently cancelled.
The awards granted in April 2022 under the 2014 Long-Term
Incentive Plan (LTIP) matured as at 31 December 2024, resulting
in 100% vesting. Details regarding the vesting of the 2022 LTIP
awards can be found in the Directors’ Remuneration Report on
pages 76 and 87. Details regarding the 2023 LTIP awards that
are due to vest in April 2026 can also be found in the Directors’
Remuneration Report on page 79.
There were no share options granted under the Company’s Save
As You Earn (SAYE) Scheme in 2022, therefore, no SAYE Scheme
maturity took place in 2025. In October 2025, a grant of 3,071,313
shares was made under the SAYE Scheme. Further details of
the SAYE Scheme can be found on page 88 in the Directors’
Remuneration Report.
At the 2025 AGM, shareholders approved the renewal of the Scrip
Dividend Scheme, which authorises the Directors to offer and allot
ordinary shares in lieu of cash dividends to those shareholders
who elect to participate in the scrip dividend. This authority was
granted for a period of three years (until the conclusion of the
2028 AGM), which is in line with the guidelines of the Investment
Association (IA) requiring shareholder approval to be sought to
renew the Directors’ authority to offer a scrip dividend scheme
at least once every three years. Further information on the Scrip
Dividend Scheme is set out on page 155. Details about joining the
Scrip Dividend Scheme, including the scrip dividend mandate form,
can be found on the Company’s website at www.costain.com.
The following ordinary shares were issued in 2025:
Purpose Recipient
Number
of shares
Nominal
value
LTIP awards Employee share trust 3,800,000 £38,000
Scrip dividend
scheme
Scrip participants 543,908 £5,439.08
The Directors of the Company present their report together
with the audited consolidated accounts for the year ended 31
December 2025.
89Strategic ReportOverview Governance Financial Statements
Restrictions on transfer of securities
There are no restrictions on the transfer of securities in the Company, except:
• that certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws); and
pursuant to the Company’s Share Dealing Code, whereby the Directors and certain employees of the Company require the approval of
the Company to deal in the Company’s ordinary shares.
The Company is not aware of any agreements between holders of securities that may result in restrictions on the transfer of securities.
Major shareholders
Notifications provided to the Company by major shareholders in accordance with the Disclosure Guidance and Transparency Rules
(DTR) are published via a Regulatory Information Service and on the Company’s website. The Company has been notified of the following
interests in voting rights in its shares as at 31 December 2025. Please note that percentages provided are as at the date of notification:
Shareholder Date of notification
Number of
shares/voting
rights
% of voting rights
notified as at 31
December 2025
UBS
1
31/12/2025 15,919,463 5.97
FIL Limited 21/10/2025 13,396,456 5.02
Oasis Management Company Limited 06/10/2025 26,779,487 10.04
OP Fund Management Ltd 14/07/2025 8,127,753 3.00
Ennismore Fund Management Limited 19/06/2025 8,100,805 2.97
J O Hambro Capital Management Limited 07/05/2025 13,408,080 4.92
1
As at 6 March 2026, the latest practicable date, UBS held less than 5% of the shares/voting rights.
Directors’ Report continued
Rights and obligations attaching to shares
In accordance with the Articles of Association, the Company
can issue shares with any rights or restrictions attached to them
provided such rights or restrictions do not restrict any rights or
restrictions attached to existing shares. These rights or restrictions
can be decided either by ordinary resolution passed by the
shareholders or by the Directors as long as there is no conflict with
any resolution passed by the shareholders. Subject to the Articles
of Association, the Companies Act 2006 and other shareholders’
rights, the issue of shares is at the discretion of the Board.
Authority to issue shares
The Directors may only issue shares if authorised to do so by the
Articles of Association or the shareholders in general meeting. At
the Company’s AGM held on 15 May 2025, shareholders granted
an authority to the Directors to allot ordinary shares up to an
aggregate nominal amount of £895,886 (89,588,600 shares).
This authority is due to expire at the end of the upcoming AGM
or, if earlier, at close of business on 15 August 2026. Therefore,
shareholders will be asked to renew and extend the authority
given to the Directors at the last AGM, to allot shares in the
Company, or grant rights to subscribe for, or to convert any
security into, shares in the Company for the purposes of Section
551 of the Companies Act 2006. Further details on the resolution
are provided in the Notice of AGM, which accompanies this Annual
Report (Notice of AGM).
Disapplication of pre-emption rights
If the Directors wish to allot new shares and other equity
securities, or sell treasury shares, for cash (other than in
connection with an employee share scheme), company law
requires that these shares are offered first to shareholders in
proportion to their existing holdings. There may be occasions,
however, when the Directors need the flexibility to finance
business opportunities by the issue of shares without a
pre-emptive offer to existing shareholders.
This cannot be done under the Companies Act 2006 unless the
shareholders have first waived their pre-emption rights.
At the forthcoming AGM, shareholders will be asked to pass two
special resolutions to grant the Directors powers to disapply
shareholders’ pre-emption rights under certain circumstances.
Further details on the resolutions are provided in the Notice of
AGM.
Power in relation to the Company buying back
its own shares
The Directors may only buyback shares if authorised to do so
by the Articles of Association or by a special resolution of the
shareholders at a general meeting. Any shares that have been
bought back may be held as treasury shares, and either be resold
for cash, cancelled (either immediately or in the future), or used
for the purposes of the Company’s employee share schemes. Any
cancelled treasury shares will, thereby, reduce the amount of the
Company’s issued share capital.
The Company undertook a buyback programme in 2025, and
a total 6,395,100 shares (nominal value of £63,951.00) were
purchased and subsequently cancelled.
The Company did not buyback any shares during the period from
1 January 2026 to the date of this report.
At the forthcoming AGM, authority will again be sought from the
shareholders to grant authority for the Company to repurchase up
to 10% of the issued share capital of the Company. Further details
on the resolution are provided in the Notice of AGM.
Securities carrying special rights
No person holds securities in the Company carrying special rights
with regard to control of the Company.
Costain Group PLC
| Annual Report and Accounts 2024
90
Restrictions on voting
No member shall be entitled to vote at any general meeting or
class meeting in respect of any share held by them if any call or
other sum then payable by them in respect of that share remains
unpaid or if a member has been served with a restriction notice (as
defined in the Articles of Association) after failure to provide the
Company with information concerning interests in those shares
required to be provided under the Companies Act 2006.
The Company is not aware of any agreement between holders of
securities that may result in restrictions of voting rights.
Employee Share Trust
As at 31 December 2025, JTC Share Plan Trustee (Guernsey)
Limited, as trustee of the Costain Group Employee Trust, held
2.25% (2024: 1.53%) of the issued share capital of the Company
on trust for the benefit of those employees who exercise their
share awards/options under the Company’s LTIP, Share Deferral
Plan and SAYE Scheme (the latter in respect of ‘good leavers’
who leave the employment of the Company before their contract
matures). For details of share-based payments see note 21 on
pages 146 to 148. The trustee does not exercise any right to vote
or to receive a dividend in respect of its shareholding.
Shareholder communication and engagement
The Company remains committed to maintaining good
relationships with both institutional and private shareholders.
There continues to be regular dialogue with institutional investors
through our Chief Executive Officer, Chief Financial Officer and
Investor Relations and Corporate Communications Director, and
our Chair meets with some of our largest shareholders.
Additional details of how the Company engages with shareholders
can be found on pages 18 and 19.
The Chair is available to discuss strategy and governance issues
with shareholders. The Senior Independent Director, Tony Quinlan,
is available to shareholders if they have any concerns that have
not been, or cannot be, addressed through the normal channels
of Chair, Chief Executive Officer or Chief Financial Officer. The
Remuneration Committee Chair, Fiona MacAulay, contacts the
Company’s top 10 shareholders on an annual basis to explain how
the current Directors’ Remuneration Policy has been applied in the
year and inviting engagement. Ahead of the triennial Directors’
Remuneration Policy renewal at the upcoming AGM, shareholders
were engaged to discuss the structure of Executive pay (please
see page 66 for more information).
The Company obtains feedback from its brokers, Investec and
Panmure Liberum, on the views of institutional investors on a
non-attributed basis. The Board routinely reviews reports from
its brokers on issues relating to recent share price performance,
trading activity and institutional sentiment.
The Board also receives copies of relevant analysts’ reports
on an ad hoc basis. The AGM is an important opportunity to
communicate directly with shareholders. The AGM provides
shareholders with an opportunity to ask questions of the Directors
during the meeting.
At any time, shareholders may raise issues or concerns by
contacting investor relations (see contact details on the inside of
the back cover).
Accountability
Financial and business reporting
The Board is required by the 2024 Code to present a fair, balanced
and understandable assessment of the Company’s position and
prospects and reference is made to the Statement of Directors’
Responsibilities on page 95 together with the statement on
the status of the Company as a going concern in note 2 to
the financial statements on page 113 and the financial viability
statement on page 40.
The preparation of this Annual Report involved input from a
number of functions across the Group. The Board was involved to
enable review, challenge and discussion ahead of approving the
final content.
The Board also recognises that its responsibility to present a fair,
balanced and understandable assessment extends to interim and
other price-sensitive reports that the Company may publish from
time to time.
Business model
The Overview and Strategic Report on pages 1 to 41 give details of
the Company’s business model.
Going concern and viability
As mentioned above, the Group’s going concern statement is
detailed in note 2 to the financial statements on page 113 and the
long-term viability statement is set out on page 40.
Risk and internal control
Risk management
The Board is responsible for undertaking a robust assessment
of the principal risks facing the Group. This includes those risks
that would threaten its business model, sustainability, future
performance, solvency and liquidity and ensuring that appropriate
mitigating actions are in place to manage them. The Group’s
approach to risk management ensures that, on an ongoing basis,
the risks to the Group’s objectives are identified, assessed and
managed.
The Board and Audit and Risk Committee, as appropriate,
considered the detailed work undertaken by the risk and
assurance function to further review and define Group risks. This
included the approach to principal risk selection and details of
the underlying Group risks including mitigations, together with
contract risk assurance. These review processes and outcomes
are described in more detail on pages 34 to 39 of the Strategic
Report and in the Audit and Risk Committee Report on pages 54
to 57.
Internal control
The Board is responsible for the Group’s systems of risk
management and internal control and is required to regularly
review their effectiveness. The Audit and Risk Committee has
undertaken this review in accordance with the requirements of
the Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting, published by the Financial
Reporting Council (FRC), throughout the year, and up to the date
of this Annual Report. Further details can be found on page 56 of
the Audit and Risk Committee Report.
91Strategic ReportOverview Governance Financial Statements
Directors’ Report continued
The Group uses the Costain Way as the framework for the
systems and controls in place to ensure that exposure to
significant risks is managed appropriately. The Board recognises
that such a system can only manage, rather than eliminate,
the risk of failure to achieve business objectives and can only
provide reasonable, but not absolute, assurance against material
misstatement or loss.
The Group also has an independent internal audit function
outsourced to Forvis Mazars, which undertakes a programme
of risk-based audits across our operations throughout the year.
All audit reports are shared with the relevant business owners
who are accountable for implementing appropriate measures to
address any risk or control weaknesses, together with the Chief
Executive Officer and Chief Financial Officer.
The reports are also shared with the Audit and Risk Committee
and the External Auditor. The Audit and Risk Committee scrutinises
the internal audit activity. Further details can be found on page 56
of the Audit and Risk Committee Report.
Amendment of Articles of Association
Unless expressly specified to the contrary in the Articles
of Association of the Company, the Company’s Articles of
Association may be amended by special resolution of the
Company’s shareholders. A copy of the Articles of Association is
available on the Company’s website at www.costain.com.
Political donations
No political donations were made during the year ended
31 December 2025 (2024: nil). The Company has a policy of not
making donations to political organisations. As a precautionary
measure, shareholder approval is being sought at the forthcoming
AGM for the Company and its subsidiaries to make donations
and/or incur expenditure which may be construed as ‘political’ by
the wide definition of that term included in the relevant legislation.
Further details on the resolution are provided in the Notice of AGM.
Financial instruments
Details of the Group’s use of financial instruments, together with
information on policies and exposure to price, liquidity, cash
flow, credit, interest rate and currency risks, can be found in
note 18 on pages 137 to 141. All information detailed in this note
is incorporated into the Directors’ Report by reference and is
deemed to form part of the Directors’ Report.
Significant agreements – change of control
The Directors are not aware of any significant agreements to
which the Company and/or any of its subsidiaries or associates
are a party that take effect, alter or terminate upon a change of
control of the Company following a takeover bid, save in respect
of the facility agreements relating to the Company’s banking and
surety bonding facilities, which would become terminable upon a
change of control.
There are no agreements between the Company and its Directors
or employees providing for compensation for loss of office or
employment as a result of a successful takeover bid except that
provisions of the Company’s employee share schemes and plans
may cause options and awards to be granted to employees under
such schemes and plans to vest on a takeover.
Events after the reporting date
There are no reportable events after the reporting date.
Research and development
The Group is involved in research and development in its
Highways, Integrated Transport, Aviation, Energy, Nuclear,
Defence, Water and Rail sectors. The Group’s engineers and
technical staff in these sectors seek to develop and deliver
technical advances in sustainable energy and material solutions,
digital capability to improve safety performance and drive
efficiency through modern methods of construction and
productivity efficiencies through new ways of working. (see pages
3, 16 to 17, 20 to 21 and the operational review on pages 12 to 15).
In undertaking certain elements of this research and development
work, the Group is supported by arrangements with clients,
academia and various technology specialists.
Greenhouse gas emissions
Page 31 of the Strategic Report detail the greenhouse gas
emissions disclosures required by the Companies Act 2006
(Strategic Report and Directors’ Report) Regulations 2013. This
information is incorporated by reference into (and shall be deemed
to form part of) this report.
Information required by UKLR 6.6.1R
There is no further information required to be disclosed under
UKLR 6.6.1R.
Overseas interests
Details of the Company’s overseas subsidiary undertakings can
be found in note 24 on pages 149 to 152. The Company has one
overseas branch in Abu Dhabi.
Directors
Biographies of the Board are given on pages 42 and 43 and
include details of the skills, competencies and a brief career
history of Directors in post as at the date of this report and the
Committees on which they serve.
Appointment and replacement of Directors
The appointment and replacement of Directors is governed by the
Company’s articles, the 2024 UK Corporate Governance Code,
the Companies Act 2006 and related legislation. Directors may be
appointed by the Company by ordinary resolution or by the Board.
At every AGM of the Company, all Directors are required to retire
from office and may offer themselves for reappointment by the
members.
The Board, or any Committee authorised by the Board, may
from time to time appoint one or more Directors to hold any
employment or executive office for such period and on such terms
as they may determine and may also revoke or terminate any such
appointment.
The Company may, by special resolution, remove any Director
before the expiration of their period of office. The office of a
Director shall also be vacated under a number of situations, which
are set out in the Articles of Association of the Company. These
include a Director wishing to resign, being required to step down
due to ill health, becoming bankrupt or being prohibited by law
from being a Director.
92 Costain Group PLC | Annual Report and Accounts 2025
The Executive Directors have contracts of employment with the
Company, terminable on 12-months’ notice, while the Chair and
Non-Executive Directors all have letters of appointment with the
Company. Details of appointment dates and termination periods
are available in the Directors Remuneration Report on page 51.
An Independent Non-Executive Director’s appointment is
for an initial period of three years, at the expiry of which, the
appointment is reviewed to determine whether the appointment
should continue.
All contracts and letters of appointment are available for
inspection at the Company’s registered office, by appointment,
during normal business hours.
Directors’ conflicts of interest
The Company has effective procedures in place for managing
conflicts of interest, which have been operated during the year.
Directors are required to declare all external appointments or
relationships with other companies and the Board has adopted
appropriate processes to manage and, if appropriate, approve any
such appointment or relationship, which could result in a possible
conflict of interest.
The Board has satisfied itself that there is no compromise to the
independence of the Directors who have appointments on the
boards of, or relationships with, other companies. The Board has
approved the actual or potential situational conflicts of interest
of Kate Rock, a director of Keller Group plc; of Tony Quinlan,
a director of Hill & Smith Holdings PLC; and Steve Mogford, a
director of Intertek Group plc, all non-material suppliers to the
Company in terms of value of goods and services.
Powers of the Directors
Subject to the Company’s Articles of Association, the Companies
Act 2006 and any directions given to the Company by special
resolution, the business of the Company will be managed by the
Board, which may exercise all the powers of the Company. In
particular, the Board may exercise all the powers of the Company
to borrow money, to guarantee, to indemnify, to mortgage or
charge any of its undertakings, property, assets (present and
future) and uncalled capital and to issue debentures and other
securities and to give security for any debt, liability or obligation of
the Company or of any third party.
Directors’ interests
No Director had any material interest in any contract of
significance with the Group during the period under review. Details
of Directors’ emoluments and interests in shares (including their
connected persons’ beneficial interests) in the Company, including
any changes in interests during 2025, are contained in the
Directors’ Remuneration Report, which appears on pages 62 to 88.
Directors’ indemnity
Costain Group PLC maintains liability insurance for its Directors
and officers. There were no subsisting indemnities in favour of its
Directors or Officers during 2025.
Diversity
Details of the Company’s policy on diversity and inclusion within
the business (including at Board level), are provided in the
Nomination Committee Report on pages 58 to 61. Apart from
ensuring that an individual has the ability to carry out a particular
role, the Company does not discriminate in any way. The Company
endeavours to retain employees if they become disabled, making
reasonable adjustments to their role and, if necessary, looking
for redeployment opportunities within the Group. The Company
also ensures that training, career development and promotion
opportunities are available to all employees irrespective of gender,
race, age or disability.
Employee information
The average number of employees within the Company and Group
is shown in note 6 to the financial statements on page 126.
The Company maintains a strong communication network
and employees are encouraged to discuss with Directors and
management matters of interest and issues affecting the
day-to-day operations of the Group. Regular employee
engagement surveys are run by the Company, the results of
which are communicated to employees.
Employees are also kept informed of the financial and economic
factors affecting the Company’s performance, the strategy and
other matters of concern to them as employees, through various
means including regular leadership briefings and blogs from the
Chief Executive Officer and other senior managers and via the
Company’s intranet site. Employees also have the opportunity to
provide feedback and ask questions when Directors and senior
managers visit sites, at employee webinars, as well as via the
employee forum ‘Your Voice’. Amanda Fisher was appointed as
Workforce Engagement Director during 2025, details of her visits
are included on page 53.
The Company operates, when considered appropriate, an
all-employee share plan (the SAYE Scheme) enabling employees
to become shareholders and build a stake in the future success
of the Company. As mentioned on pages 80 and 88, a grant was
made under the SAYE Scheme in 2025.
Stakeholder engagement
For more information on how the Directors have engaged with the
workforce, customers, suppliers and others, and how the Directors
have had regard to their interests, and the effect of that regard
including on principal decisions, see the stakeholder engagement
section (Section 172) on pages 18 to 21 and the workforce
engagement section on page 53 of the Governance Report.
Additionally, the Company engages with subcontractors via the
twice-yearly safety, health and environment (SHE) impact days
and monthly leadership engagement visits to projects and sites.
Additional information regarding the Company’s charitable giving
can be found on pages 1 and 17.
93Strategic ReportOverview Governa nce Financial Statements
Essential contracts or other arrangements
Given the scope and diversity of the Company’s activities, the
Company does not consider that it has contractual or other
arrangements, which are essential to the business of the Group,
and which are required to be disclosed.
Transactions with related parties
Transactions between the Company, its subsidiaries (where
not exempted by FRS 101), joint ventures and associates, joint
operations, the Costain Pension Scheme and with its Directors and
Executive Officers, which are related parties are set out in note 25
to the financial statements on page 153. There have been no other
related party transactions during the year.
Disclosure of information to the Auditor
Each of the Directors confirms that, so far as they are aware,
there is no relevant audit information (as defined in Section 418 of
the Companies Act 2006) of which the Group’s and Company’s
External Auditor is unaware and that each Director has taken all
the steps that they ought to have taken as a Director to make
themself aware of any relevant audit information and to establish
that the Group’s and Company’s External Auditor is aware of that
information.
This confirmation is given and should be interpreted in accordance
with the provisions of Section 418 of the Companies Act 2006.
By Order of the Board
Nicole Geoghegan
Company Secretary
9 March 2026
Directors’ Report continued
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Costain Group PLC | Annual Report and Accounts 2025
Statement of Directors’ responsibilities
in respect of the financial statements
The Directors are responsible for preparing the annual report
and accounts and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have prepared the Group financial statements in accordance with
UK-adopted international accounting standards and the Company
financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 ‘Reduced Disclosure Framework’,
and applicable law).
Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing the financial
statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable UK-adopted international accounting
standards have been followed for the Group financial
statements and FRS 101 has been followed for the Company
financial statements, subject to any material departures
disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable
and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group’s and Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial statements
and the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the
Group’s and Company’s position and performance, business model
and strategy.
Each of the Directors, whose names and functions are listed in the
Governance section confirm that, to the best of their knowledge:
• the Group financial statements, which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profits or losses of the Group;
• the Company financial statements, which have been prepared in
accordance with FRS 101, give a true and fair view of the assets,
liabilities and financial position of the Company; and
• the Strategic Report includes a fair review of the development
and performance of the business and the position of the Group
and Company, together with a description of the principal risks
and uncertainties that they face.
By Order of the Board
Nicole Geoghegan
Company Secretary
9 March 2026
Directors’ Responsibility Statement
95
Strategic ReportOverview Governance Financial Statements
Independent Auditors’ Report to the Members of Costain Group PLC
Report on the audit of the financial statements
Opinion
In our opinion:
• Costain Group PLC’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair
view of the state of the Group’s and of the Company’s affairs as at 31 December 2025 and of the Group’s profit and the Group’s cash
flows for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards as
applied in accordance with the provisions of the Companies Act 2006;
• the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise:
• the Consolidated Statement of Financial Position as at 31 December 2025;
• the Company Statement of Financial Position as at 31 December 2025;
• the Consolidated Income Statement for the year then ended;
• the Consolidated Statement of Comprehensive Income for the year then ended;
• the Consolidated Statement of Changes in Equity for the year then ended;
• the Company Statement of Changes in Equity for the year then ended;
• the Consolidated Cash Flow Statement for the year then ended; and
• the notes to the financial statements, comprising material accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Costain Group PLC Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 5, we have provided no non-audit services to the Company or its controlled undertakings in the
period under audit.
Our audit approach
Overview
Audit scope
• The Group is UK based and has two main segments; Transportation and Natural Resources. We have identified two legal entities as
significant audit components, either due to their size or their risk characteristics. Additionally, we scoped three other legal entities as
non-significant components requiring an audit of certain account balances, to achieve the desired coverage over all financial statement
areas. We identified a number of additional inconsequential components for the Group audit.
• The Group engagement team audited the Company and other centralised functions, including those covering the Group tax operations,
post-retirement benefits and goodwill impairment assessments. The Group engagement team performed audit procedures over the
Group consolidation and financial statement disclosures and performed risk assessment analytics over balances out of scope for non-
significant components.
• In total, our scope accounted for approximately 95% (2024: 96%) of Group revenues and 97% (2024: 90%) of Group profit before tax.
The percentage of Group profit before tax is calculated on an absolute basis, which aggregates component profits and losses.
Key audit matters
• Contract accounting, excluding schedule of rates and pure cost plus contracts (Group)
• Carrying value of investments in Group subsidiary companies (Company)
9696 Costain Group PLC | Annual Report and Accounts 2025
Materiality
• Overall Group materiality: £5,200,000 (2024: £5,500,000) based on 0.5% of revenue (2024: Professional judgement (at equivalent to
0.44% of the Group’s revenue)).
• Overall Company materiality: £2,700,000 (2024: £2,360,000) based on 1% of total assets.
• Performance materiality: £ 3,900,000 (2024: £4,125,000) (Group) and £2,025,000 (2024: £1,770,000) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Impairment of Goodwill (Group) and the Presentation of Group’s financial performance (Group), which were key audit matters last
year, are no longer included because of the improvement in the order book and performance of both the Transportation and Natural
Resources divisions, including the reduction in audit risk, and due to the reduction of the quantum of adjusting items in the current year.
Otherwise, the key audit matters below are consistent with last year.
97Strategic ReportOverview Governance Financial Statements
Key audit matter How our audit addressed the key audit matter
Contract accounting, excluding schedule of rates and pure
cost plus contracts (Group)
Refer to the Audit and Risk Committee Report, note 2
(Summary of material accounting policies and significant areas
of judgement and estimation), note 4 (operating segments),
note 15 (Assets and liabilities related to contracts with
customers) and note 16 (Trade and other receivables).
The Group has significant long-term contracts in its
Transportation and Natural Resources divisions. The
recognition of revenue in relation to long term construction
contracts is in accordance with IFRS 15 and is based on
either the measure of progress calculated using the stage
of completion (determined by the cost incurred to date as
a proportion of total estimated cost) or cost plus contracts
with specific risk and / or incentive clauses (contracts where
the revenue is based on the actual costs incurred plus an
agreed fee adjusted for risk including as an example, pain/gain
mechanisms or a fee moderation matrix).
Revenue and associated costs on stage of completion or risk
and incentive cost plus contracts are a significant risk for our
audit because of the inherent uncertainty in estimates of the
forecast costs and adjustment clauses impacting revenues
on contracts. An error in the contract forecast or risk and
incentive calculations could result in a material variance in the
amount of revenue and associated profit or loss recognised to
date and therefore, within the current financial year.
The Group’s portfolio of contracts typically use standard
forms of construction contracts, however, given the complex
nature and programmes of work undertaken, the majority of
contracts are further tailored to include, for example, incentive
or other risk sharing mechanisms that require estimates to be
made. These estimates include but are not limited to project
or alliance pain / gain mechanisms and programme and cost
incentives.
These estimates also include the determination of the
expected recovery of costs arising from, for example,
variations to the contract requested by the customer,
compensation events, and claims made both by and against
the Group for delays.
The Group’s accounting policy is to recognise additional
contractual amounts receivable from customers only when
these amounts are considered ‘highly probable of no
significant reversal’.
On the basis of the significant estimates, judgements and
inherent uncertainty involved in determining the appropriate
revenue recognition and associated profit, we identified
Contract Accounting (excluding schedule of rate contracts
and pure cost plus contracts) as a Key Audit Matter and were
particularly focussed on the existence / occurrence and
accuracy of revenue recognition.
We focussed our work on those contracts with the greatest estimation
uncertainty and requiring the most judgement over the final contract position
and, therefore, the impact on the current year revenue and profitability. We
selected risk based contracts on a targeted basis for our testing, based on
both quantitative and qualitative criteria, including:
• contracts with high levels of revenue recognised in the year;
• low margin or loss making contracts;
• contracts with significant margin movements;
• contracts with significant balance sheet exposure, in particular high levels
of contract assets; and
• contracts identified with higher risk criteria through our discussions with
management, review of board minutes, review of legal reports and review
of publicly available information.
Our audit procedures were tailored according to the specific risk profile of
each contract and included, but were not limited to, the following procedures:
• Obtaining an understanding of the relevant contractual clauses, terms
and conditions, and agreeing forecast revenue to signed contracts and
variations, as well as agreed compensation events or other corroborative
and supporting documentation;
• Challenging management’s key assumptions in the end life revenue,
including the expected recovery of variations, claims and compensation
events from clients, as well as pain / gain mechanisms and other related
contract incentives, to determine the basis on which the associated
revenue was considered to be ‘highly probable’ of not reversing;
• Challenging those assumptions in respect of estimated recoveries from
subcontractors, designers, and insurers included in the forecast, to
determine their recoverability;
• Substantively testing a sample of actual costs incurred to date to check
that these are complete and had been recorded accurately;
• Performing a margin analysis on the end-of-life forecasts to assess the
performance of the contract portfolios year on year;
• Inspecting correspondence and/or meeting minutes with customers
concerning variations, claims and compensation events, and obtaining
third-party assessments of these from legal or technical experts
contracted by the Group, if applicable, to assess whether this information
was consistent with the estimates made;
• Reconciling revenue recognised with amounts applied for and amounts
certified by clients;
• Agreeing forecast costs to complete to supporting evidence (such as
orders signed with subcontractors, performing look back testing and
assessing the appropriateness of forecast run rates) and applying historical
cost run-rate to challenge the completeness and accuracy of the forecast
costs to complete, including any cost contingencies held;
• Assessing management’s estimates and any associated risks in relation to
forecasts of disallowed costs or actual withheld costs, and the associated
impact on the project’s forecast outturn; and
• Assessing the recoverability of balance sheet items (in particular contract
assets), by obtaining evidence of the value of work performed and, where
applicable, comparing this to subsequent invoicing and cash receipts.
Independent Auditors’ Report to the Members of Costain Group PLC continued
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Costain Group PLC | Annual Report and Accounts 2025
Key audit matter How our audit addressed the key audit matter
For the residual contract population (‘the tail’), performing risk based
procedures including, but not limited to, the following procedures:
• Testing contract assets / liabilities by recomputing the revenue and
verifying to project certifications as at 31 December 2025;
• Testing the cost to come forecasts (where relevant to the nature of the
contract); and
• Review the contract forecast report for any unusual items including
verifying any testing material unagreed changes.
Based on all of the evidence obtained from the above procedures, we
concluded that the recognition of contract revenues and profits / losses
was materially appropriate. We also reviewed the disclosures of estimation
uncertainty in relation to significant ongoing contracts included in the financial
statements and satisfied ourselves that these were appropriate
Carrying value of investments in Group subsidiary
companies (Company)
The Company holds investments in subsidiaries of £161.0m
(2024: £157.9m) as disclosed in note 14.
Management has performed an assessment to identify if
impairment indicators exist in respect of the carrying value
of the Company’s investments in subsidiaries that would
trigger the requirement for a full impairment assessment to
be performed. The Directors concluded that, at the balance
sheet date, there were no indicators of impairment that would
trigger the requirement for a full impairment assessment to
be performed. This area was identified as a Key Audit Matter
given the materiality of these balances.
In evaluating the Directors’ assessment of impairment indicators in respect of
the carrying value of subsidiary investments, our audit procedures included,
but were not limited to the following:
• Assessing the accounting policy for investments in subsidiaries to ensure
this was compliant with accounting standards;
• Obtaining management’s assessment of impairment indicators in respect of
the carrying value of the Company’s investments in subsidiaries, taking into
account relevant intercompany balances, and validating the conclusions
reached by management that no impairment indicators exist that would
trigger the requirement for an impairment assessment to be performed;
• In doing this, we considered the market capitalisation of the Company at
31 December 2025, which exceeded the carrying value of investments in
subsidiary undertakings; and
• We also considered the latest expected performance of the Group by
comparing the cash flow forecasts audited as part of other audit matters
to those estimated in the prior year by management, as well as the
performance in the year.
We determined that management’s conclusion, that at the balance sheet date
there were no impairment indicators that would trigger the requirement for a
full impairment assessment to be performed, was appropriate.
99Strategic ReportOverview Governance Financial Statements
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in
which they operate.
The Group is UK based and has two main segments; Transportation and Natural Resources. In establishing the overall approach to the
Group audit, we determined the type of work needed to be performed at these reporting units. We identified the following legal entities
as significant components; Costain Limited (financially significant component) and Costain Engineering & Construction Limited (significant
component due to risk). We have identified three other non-significant components, Richard Costain Limited, Costain Group PLC and
Costain Oil, Gas & Process Limited, which in our view, required an audit of certain account balances, either due to their size or their risk
characteristics. All work is undertaken by the Group engagement team.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process they have adopted to assess the extent of the
potential impact of climate change risk on the Group’s financial statements. Management considers that the impact of climate change
does not give rise to a material financial statement impact. We used our knowledge of the Group to evaluate management’s assessment.
We particularly considered how climate change risks would impact the assumptions made in the forecasts prepared by management
used in their estimates and judgements in respect of long-term contract accounting and impairment analyses. We also considered the
consistency of the disclosures in relation to climate change made in the other information within the Annual Report with the financial
statements, ensuring this is consistent with our knowledge from the audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality
£5,200,000 (2024: £5,500,000). £2,700,000 (2024: £2,360,000).
How we determined it
0.5% of revenue (2024: Professional
judgement (at equivalent to 0.44% of the
Group’s revenue))
1% of total assets
Rationale for benchmark applied
We considered different benchmarks based
on a number of profit measures and revenue,
taking into account the performance of the
business over the last few years and the
overall scale of the business. We concluded
that an amount of £5.2m was appropriate,
which represents 0.5% of the Group’s
revenue.
The parent Company primarily holds cash,
investments in subsidiaries and intercompany
payables. There are no trading activities in the
Company, therefore, we considered a balance
sheet measure to be the most appropriate
auditing benchmark. The higher Company
materiality level was used for the purposes
of testing balances not relevant to the Group
audit, such as investments in subsidiary
undertakings and intercompany balances.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range
of materiality allocated across components was between £0.6m and £4.6m. Certain components were audited to a local statutory audit
materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit
and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample
sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £3,900,000 (2024: £4,125,000) for the Group
financial statements and £2,025,000 (2024: £1,770,000) for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was
appropriate.
We agreed with the Costain Group PLC Audit and Risk Committee that we would report to them misstatements identified during our audit
above £260,000 (Group audit) (2024: £275,000) and £135,000 (Company audit) (2024: £118,000) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
Independent Auditors’ Report to the Members of Costain Group PLC continued
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Costain Group PLC | Annual Report and Accounts 2025
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis of
accounting included:
• assessing the appropriateness of the Group and Company’s cash flow, liquidity and covenant forecasts in the context of the Group
and Company’s 2025 financial position, and its banking and related facilities which extend until September 2029 (with an optional one-
year extension to September 2030);
• understanding and assessing the appropriateness of the key assumptions used both in the base case and in the severe but plausible
downside scenario, including assessing whether we considered the downside scenarios to be appropriately severe;
• testing the mathematical accuracy of management’s cash flow models and examining the minimum committed facility headroom under
the base case cash flow forecasts and sensitised cases;
• obtaining the debt facility agreements and agreeing the key terms and financial covenants assessed by management back to these;
• reperforming the Group’s forecast covenant compliance calculations, including sensitising the forecasts of liquidity and profitability to
assess the potential impact of downside sensitivities on future covenant compliance; and
• reviewing and assessing the disclosures provided relating to the going concern basis of preparation in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any
form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters
as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
report for the year ended 31 December 2025 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors’ report..
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
101Strategic ReportOverview Governance Financial Statements
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing
material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue to
do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and
why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group and Company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the
statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement
is consistent with the financial statements and our knowledge and understanding of the Group and Company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the Group’s and Company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Costain Group PLC Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review
by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Directors’ Responsibility Statement, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Independent Auditors’ Report to the Members of Costain Group PLC continued
102
Costain Group PLC | Annual Report and Accounts 2025
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to health and safety legislation, anti-bribery and corruption legislation and construction laws, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that
have a direct impact on the financial statements such as the Companies Act 2006 and UK tax legislation. We evaluated management’s
incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and
determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, and
management bias in accounting estimates. Audit procedures performed by the engagement team included:
• Discussion with management, internal audit and the Group’s in-house legal advisers, including consideration of known or suspected
instances of non-compliance with laws and regulations and fraud;
• Reading the minutes of Board meetings to identify any inconsistencies with other information provided by management;
• Assessing legal expense accounts to identify significant legal spend that may be indicative of non-compliance with laws and
regulations;
• Assessment of matters reported on the Group’s whistleblowing helpline and the results of management’s investigation of such matters;
• Challenging estimates and judgements made by management in their significant accounting estimates, in particular in relation to
contract accounting (see the related key audit matter above);
• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations;
• Incorporating an element of unpredictability into our procedures, aligned to our fraud risk assessment; and
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and
regulations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We
will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
103Strategic ReportOverview Governance Financial Statements
Independent Auditors’ Report to the Members of Costain Group PLC continued
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the Company for the financial year ended 31 December 2017. Our uninterrupted engagement covers 9
financial years.
Other matter
The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial
statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R - 4.1.18R and filed on the
National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over whether the structured
digital format annual financial report has been prepared in accordance with those requirements.
Christopher Richmond (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
9 March 2026
104 Costain Group PLC | Annual Report and Accounts 2025
Consolidated Income Statement
Year ended 31 December 2025
| 2025 | 2024 | ||
| Note(s) | £m | £m | |
| Continuing operations | |||
Revenue | 4 | ||
Cost of sales | 5 | ( | ( |
Gross profit | |||
Administrative expenses | 5 | ( | ( |
Operating profit | 4/5 | ||
Share of results of joint ventures and associates | 14 | ( | |
Profit from operations | 4/5 | ||
Finance income | 8 | ||
Finance expense | 8 | ( | ( |
Net finance income | |||
Profit before tax | 4/5 | ||
Taxation | 9 | ( | ( |
Profit for the year attributable to equity holders of the parent | |||
| Earnings per share | |||
Basic | 10 | ||
Diluted | 10 |
The Consolidated Income Statement shows the income and expenses from continuing operations.
105Strategic ReportOverview Governance Financial Statements
106
Consolidated Statement of Comprehensive Income
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Profit for the year | ||
| Items that may be reclassified subsequently to profit or loss: | ||
| Exchange differences on translation transferred to the income statement | ( | |
Total items that may be reclassified subsequently to profit or loss | ( | |
| Items that will not be reclassified to profit or loss: | ||
Remeasurement of retirement benefit asset | ( | |
Tax recognised on remeasurement of retirement benefit asset | ( | |
Tax recognised on share-based payments | ||
Total items that will not be reclassified to profit or loss | ( | |
Other comprehensive income/(expense) for the year | ( | |
Total comprehensive income for the year |
Costain Group PLC | Annual Report and Accounts 2025
Consolidated Statement of Financial Position
As at 31 December 2025
| 2025 | 2024 | ||
| Note | £m | £m | |
| Assets | |||
| Non-current assets | |||
Intangible assets | 12 | ||
Property, plant and equipment | 13 | ||
Equity accounted investments | 14 | ||
Retirement benefit asset | 21 | ||
Trade and other receivables | 16 | ||
Deferred tax | 9 | ||
Total non-current assets | |||
| Current assets | |||
Trade and other receivables | 16 | ||
Insurance recovery asset | 20 | ||
Income tax | 9 | ||
Cash and cash equivalents – with restrictions | 17 | ||
Cash and cash equivalents | 17 | ||
Total current assets | |||
Total assets | |||
| Liabilities | |||
| Non-current liabilities | |||
Other payables | 19 | ||
Lease liabilities | 13 | ||
| Total non-current liabilities | |||
| Current liabilities | |||
Trade and other payables | 19 | ||
Income tax | 9 | ||
Lease liabilities | 13 | ||
Provisions for other liabilities and charges | 20 | ||
| Total current liabilities | |||
| Total liabilities | |||
Net assets | |||
| Equity | |||
Share capital | 22 | ||
Share premium | |||
Translation reserve | ( | ||
Treasury shares | ( | ( | |
Capital redemption reserve | |||
| Retained earnings | |||
Total equity |
Registered number: 1393773
107Strategic ReportOverview Governance Financial Statements
108
Note
2025
£m
2024
£m
Assets
Non-current assets
Investments in subsidiaries 14 161.0 157.9
Total non-current assets 161.0 157.9
Current assets
Trade and other receivables 16 1.2 0.6
Cash and cash equivalents 17 108.1 77.5
Total current assets
109.3 78.1
Total assets
270.3 236.0
Liabilities
Non-current liabilities
Provisions for other liabilities and charges 20 0.5 0.5
Total non-current liabilities
0.5 0.5
Current liabilities
Trade and other payables 19 60.9 46.6
Income tax 9 – 0.2
Provisions for other liabilities and charges 20 0.1 0.1
Total current liabilities
61.0 46.9
Total liabilities
61.5 47.4
Net assets
208.8 188.6
Equity
Share capital 22 2.7 2.7
Share premium 17.1 16.5
Capital redemption reserve 136.5 136.5
Retained earnings 52.5 32.9
Total equity 208.8 188.6
The profit for the year attributable to the Company was £34.4m (2024: £2.6m).
The financial statements on pages 105 to 153
were approved by the Board of Directors on 9 March 2026 and were signed on its behalf by:
Alex Vaughan Helen Willis
Director Director
Registered number: 1393773
Company Statement of Financial Position
As at 31 December 2025
Costain Group PLC | Annual Report and Accounts 2025
Consolidated Statement of Changes in Equity
Year ended 31 December 2025
| Capital | |||||||
| Share | Share | Translation | Treasury | redemption | Retained | Total | |
| capital | premium | reserve | shares | reserve | earnings | equity | |
| £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2024 | ( | ||||||
Profit for the year | |||||||
| Other comprehensive expense | ( | ( | |||||
| Issue of ordinary shares under employee share | |||||||
option plans | ( | ( | |||||
Shares awarded to satisfy employee share schemes | ( | ||||||
Equity-settled share-based payments | |||||||
| Acquisition of treasury shares | ( | ( | |||||
Nominal value reduction | ( | ( | |||||
Share buyback | ( | ( | ( | ||||
| Dividends paid | ( | ( | |||||
At 31 December 2024 | ( | ||||||
| At 1 January 2025 | ( | ||||||
| Profit for the year | |||||||
| Other comprehensive (expense)/income | ( | ||||||
Shares awarded to satisfy employee share schemes | ( | ||||||
Equity-settled share-based payments | |||||||
Acquisition of treasury shares | ( | ( | |||||
Share buyback (note 22) | ( | ( | |||||
Dividends paid (notes 11/22) | ( | ( | |||||
At 31 December 2025 | ( | ( |
Details of the nature of the above reserves are set out below.
Translation reserve
The translation reserve comprises all foreign exchange differences arising after 1 January 2004, the date of adoption of IFRS, from the
translation of the financial statements of the residual, no longer trading foreign entities, as well as from the translation of liabilities that
hedge the Group’s net investment in foreign subsidiaries.
£1.0m of cumulative exchange differences, recognised historically in other comprehensive income and carried forward in the translation
reserve, has been reclassified to the consolidated income statement in the year as a result of Costain no longer controlling a foreign
entity previously treated as a subsidiary undertaking.
Treasury shares
Treasury shares are shares in Costain Group PLC that are held by an Employee Benefit Trust for the purpose of issuing shares under the
Costain employee share schemes (see note 21 for further information on these schemes).
Capital redemption reserve
The capital redemption reserve exists to maintain the capital of the Company and relates to share capital amounts cancelled.
109Strategic ReportOverview Governance Financial Statements
110
Company Statement of Changes in Equity
Year ended 31 December 2025
Share capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
equity
£m
At 1 January 2024 138.3 16.4 – 42.1 196.8
Total comprehensive income – ––2.6 2.6
Issue of ordinary shares under employee share option plans 0.9
––(0.8) 0.1
Equity-settled share-based payments granted to employees of subsidiaries
– –– 2.3 2.3
Nominal value reduction (136.4) – 136.4 ––
Share buyback (0.1)
– 0.1 (10.0) (10.0)
Dividends paid
– 0.1 – (3.3) (3.2)
At 31 December 2024 2.7 16.5 136.5 32.9 188.6
At 1 January 2025 2.7 16.5 136.5 32.9 188.6
Total comprehensive income
– – – 34.4 34.4
Equity-settled share-based payments granted to employees of subsidiaries
––– 3.1 3.1
Share buyback (note 22)
– – – (10.0) (10.0)
Dividends paid (notes 11/22)
– 0.6 – (7.9) (7.3)
At 31 December 2025 2.7 17.1 136.5 52.5 208.8
Retained earnings
The Company grants certain of its subsidiaries rights to its equity instruments as part of its share-based payment plan incentive
schemes. The impact is recognised within retained earnings.
Capital redemption reserve
The capital redemption reserve exists to maintain the capital of the Company and relates to share capital amounts cancelled.
Costain Group PLC
| Annual Report and Accounts 2025
| 2025 | 2024 | ||
| Note(s) | £m | £m | |
| Cash flows generated from/(used by) operating activities | |||
Profit for the year | |||
| Adjustments for: | |||
Share of results of joint ventures and associates | 14 | ||
Finance income | 8 | ( | ( |
Finance expense | 8 | ||
Taxation | 9 | ||
Loss on disposals of property, plant and equipment | |||
Depreciation of property, plant and equipment | 5/13 | ||
Amortisation of intangible assets | 5/12 | ||
Transfer from translation reserve | ( | ||
Share-based payments expense | 6/21 | ||
Cash generated from operations before changes in working capital and provisions | |||
(Increase)/decrease in receivables | ( | ||
Decrease in payables | ( | ( | |
Decrease in provisions | ( | ( | |
Contributions to defined benefit pension scheme | ( | ||
Cash generated from operations | |||
Interest received | |||
Interest paid | ( | ( | |
Taxation paid | ( | ( | |
Net cash generated from operating activities | |||
| Cash flows generated from/(used by) investing activities | |||
Additions to owned property, plant and equipment and leasehold improvements | 13 | ( | ( |
Additions to intangible assets | 12 | ( | ( |
Proceeds on disposals of property, plant and equipment | |||
Net cash used by investing activities | ( | ( | |
| Cash flows generated from/(used by) financing activities | |||
Ordinary dividends paid | 11 | ( | ( |
Share buyback | ( | ( | |
Acquisition of treasury shares | ( | ( | |
Repayments of lease liabilities – principal | 17 | ( | ( |
Net cash used by financing activities | ( | ( | |
Net (decrease)/increase in cash and cash equivalents – with restrictions | 17 | ( | |
Net increase/(decrease) in cash and cash equivalents | 17 | ( | |
Net increase in cash and cash equivalents (including cash with restrictions) | |||
Cash and cash equivalents at beginning of the year (including cash with restrictions) | 17 | ||
Cash and cash equivalents at end of the year (including cash with restrictions) | 17 |
Consolidated Cash Flow Statement
Year ended 31 December 2025
111Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements
1 General information
of its registered office and principal place of business is disclosed on page 155 of this Annual Report. The principal activities of the
Company and its subsidiary undertakings (collectively referred to as the Group) are described in the Strategic Report.
The consolidated financial statements of the Company for the year ended 31 December 2025 comprise the Group and the Group’s
interests in associates, joint ventures and joint operations. The Parent Company financial statements present information about the
Company as a separate entity and not about its Group.
The financial statements were authorised for issue by the Directors on 9 March 2026.
112 Costain Group PLC | Annual Report and Accounts 2025
113
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
2 Summary of material accounting policies continued
114 Costain Group PLC | Annual Report and Accounts 2025
115
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
2 Summary of material accounting policies continued
Customer relationships | – on a straight-line basis up to seven years |
Other intangibles (including other acquired) | – on a straight-line basis up to five years |
Leasehold improvements | – lease term |
Plant and equipment | – 3 to 10 years |
116 Costain Group PLC | Annual Report and Accounts 2025
117
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
2 Summary of material accounting policies continued
Leases continued
118 Costain Group PLC | Annual Report and Accounts 2025
119
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
2 Summary of material accounting policies continued
120 Costain Group PLC | Annual Report and Accounts 2025
| Adjusting | |||
| Adjusted | items | Total | |
| 2025 | £m | £m | £m |
Revenue | 1,045.7 | – | 1,045.7 |
Cost of sales | (931.9) | – | (931.9) |
Gross profit | 113.8 | – | 113.8 |
Administrative expenses before adjusting items | (66.7) | – | (66.7) |
| Adjusting items: | |||
Restructuring costs | – | ( 2 . 6 ) | ( 2 . 6 ) |
Transformation costs | – | ( 0 . 7 ) | ( 0 . 7 ) |
Fire safety provision release | – | 1.0 | 1.0 |
Administrative expenses | (66.7) | (2.3) | (69.0) |
Operating profit | 47.1 | (2.3) | 44.8 |
Share of results of joint ventures and associates | (0.4) | – | (0.4) |
Profit from operations | 46.7 | (2.3) | 44.4 |
Net finance income | 3.8 | – | 3.8 |
Profit before tax | 50.5 | (2.3) | 48.2 |
Taxation | (11.5) | 0.6 | (10.9) |
Profit for the year attributable to equity holders of the parent | 39.0 | (1.7) | 37.3 |
Basic earnings per share | 14.5p | 13.9p |
121
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
3 Reconciliation of reported operating profit to adjusted operating profit continued
| Adjusting | |||
| Adjusted | items | Total | |
| 2024 | £m | £m | £m |
Revenue | 1,251.1 | – | 1,251.1 |
Cost of sales | (1,147.8) | – | (1,147.8) |
Gross profit | 103.3 | – | 103.3 |
Administrative expenses before adjusting items | (60.2) | – | (60.2) |
| Adjusting items: | |||
Restructuring costs | – | 0 . 1 | 0 . 1 |
Transformation costs | – | ( 5 . 4 ) | ( 5 . 4 ) |
Fire safety claims | – | (6.7) | (6.7) |
Administrative expenses | (60.2) | (12.0) | (72.2) |
Operating profit | 43.1 | (12.0) | 31.1 |
Net finance income | 5.4 | – | 5.4 |
Profit before tax | 48.5 | (12.0) | 36.5 |
Taxation | (8.9) | 3.0 | (5.9) |
Profit for the year attributable to equity holders of the parent | 39.6 | (9.0) | 30.6 |
Basic earnings per share | 14.6p | 11.3p |
122 Costain Group PLC | Annual Report and Accounts 2025
| Natural | Central | |||
| Resources | Transportation | costs | Total | |
| 2025 | £m | £m | £m | £m |
| Segment revenue | ||||
Revenue | 440.4 | 605.3 | – | 1,045.7 |
| Segment profit/(loss) | ||||
Operating profit/(loss) before other items | 35.0 | 24.9 | (12.8) | 47.1 |
Share of results of joint ventures and associates | (0.4) | – | – | (0.4) |
Operating profit/(loss) before adjusting items | 34.6 | 24.9 | (12.8) | 46.7 |
| Adjusting items: | ||||
Restructuring costs | – | – | (2.6) | (2.6) |
Transformation costs | – | – | ( 0 . 7 ) | ( 0 . 7 ) |
Fire safety provision release | – | – | 1.0 | 1.0 |
Profit/(loss) from operations | 34.6 | 24.9 | (15.1) | 44.4 |
Net finance income | 3.8 | |||
Profit before tax | 48.2 | |||
| Segment profit/(loss) is stated after charging the following: | ||||
Depreciation | 5.7 | 6.1 | – | 11.8 |
Amortisation | 0.6 | 0.5 | – | 1.1 |
| Segment assets | ||||
Reportable segment assets | 174.4 | 134.3 | 1.0 | 309.7 |
| Unallocated assets: | ||||
Retirement benefit asset | 60.0 | |||
Deferred tax | 2.9 | |||
Cash and cash equivalents | 189.3 | |||
Total assets | 561.9 | |||
| Additions to non-current assets | ||||
Property, plant and equipment | 7.6 | 5.0 | – | 12.6 |
Intangible assets | 0.5 | 0.5 | – | 1.0 |
| Segment liabilities | ||||
Reportable segment liabilities | 159.1 | 132.2 | 12.1 | 303.4 |
Income tax | 0.3 | |||
Total liabilities | 303.7 |
123
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
4 Operating segments continued
| Natural | Central | |||
| Resources | Transportation | costs | Total | |
| 2024 | £m | £m | £m | £m |
| Segment revenue | ||||
Revenue | 405.3 | 845.8 | – | 1,251.1 |
| Segment profit/(loss) | ||||
Operating profit/(loss) before adjusting items | 23.8 | 29.9 | (10.6) | 43.1 |
| Adjusting items: | ||||
Restructuring credit | – | – | 0.1 | 0.1 |
Transformation costs | – | – | (5.4) | (5.4) |
Fire safety claims | – | – | (6.7) | (6.7) |
Profit/(loss) from operations | 23.8 | 29.9 | (22.6) | 31.1 |
| Net finance income | 5.4 | |||
Profit before tax | 36.5 | |||
| Segment profit/(loss) is stated after charging the following: | ||||
| Depreciation | 4.5 | 7.4 | – | 11.9 |
Amortisation | 0.1 | 0.2 | – | 0.3 |
| Segment assets | ||||
Reportable segment assets | 144.0 | 179.1 | 0.6 | 323.7 |
| Unallocated assets: | ||||
Retirement benefit asset | 54.9 | |||
Deferred tax | 8.6 | |||
| Income tax | 1.5 | |||
| Cash and cash equivalents | 158.5 | |||
| Total assets | 547.2 | |||
| Additions to non-current assets | ||||
Property, plant and equipment | 12.2 | 14.6 | – | 26.8 |
| Intangible assets | 2.7 | 3.1 | – | 5.8 |
| Segment liabilities | ||||
| Reportable segment liabilities | 125.7 | 175.5 | 10.3 | 311.5 |
Total liabilities | 311.5 |
124 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | |
| £m | £m | |
| Profit before tax is stated after charging: | ||
Amortisation and impairment of intangible assets (note 12) | 1.1 | 0.3 |
Depreciation of property, plant and equipment (note 13) | 11.8 | 11.9 |
Restructuring costs (note 3) | 2.6 | – |
Transformation costs (note 3) | 0.7 | 5.4 |
Fire safety claims (note 3) | – | 6.7 |
Expenses relating to short-term leases and leases of low-value assets | 24.9 | 42.6 |
| and after crediting: | ||
Fire safety provision release (note 3) | 1.0 | – |
Restructuring credit (note 3) | – | 0.1 |
Reclassification from Translation Reserve | 1.0 | – |
RDEC grant income | 4.6 | 6.3 |
| 2025 | 2024 | |
| £m | £m | |
Fees payable to the Group’s auditors for the audit of the annual financial statements | 0.2 | 0.2 |
| Fees payable to the Group’s auditors in respect of: | ||
Audit of financial statements of subsidiaries of the Company | 1.0 | 1.0 |
1.2 | 1.2 |
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Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
| 2025 | 2024 | |
| £m | £m | |
Wages and salaries | 235.8 | 233.3 |
Social security costs | 28.8 | 25.6 |
Other pension costs – defined contribution schemes (note 21) | 13.8 | 12.9 |
Share-based payments expense (note 21) | 3.1 | 2.3 |
281.5 | 274.1 |
| 2025 | 2024 | |
| Number | Number | |
| Monthly average number of persons employed | ||
Natural Resources | 1,676 | 1,608 |
Transportation | 1,349 | 1,551 |
Central | 24 | 23 |
3,049 | 3,182 |
| 2025 | 2024 | |
| £m | £m | |
Remuneration | 2.0 | 2.2 |
Post-employment benefits | – | 0.1 |
2.0 | 2.3 |
8 Finance income/(expense)
| 2025 | 2024 | |
| £m | £m | |
Interest income from bank deposits | 5.0 | 6.7 |
Interest income on the net assets of the defined benefit pension scheme (note 21) | 3.0 | 2.6 |
Finance income | 8.0 | 9.3 |
Interest payable on interest bearing bank loans, borrowings and other similar charges | (1.8) | (1.4) |
Interest expense on lease liabilities | (2.4) | (2.5) |
Finance expense | (4.2) | (3.9) |
Net finance income | 3.8 | 5.4 |
Other similar charges includes arrangement and commitment fees payable.
126 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | |
| £m | £m | |
| On profit for the year | ||
UK corporation tax at statutory rate of 25.0% (2024: 25.0%) | (5.1) | (4.1) |
Adjustment in respect of prior years | 0.2 | 1.0 |
Current tax charge for the year | (4.9) | (3.1) |
Deferred tax charge for the current year | (5.3) | (4.0) |
Adjustment in respect of prior years | (0.7) | 1.2 |
Deferred tax charge for the year | (6.0) | (2.8) |
Tax charge in the consolidated income statement | (10.9) | (5.9) |
| 2025 | 2024 | |
| £m | £m | |
| Tax reconciliation | ||
Profit before tax | 48.2 | 36.5 |
Taxation at 25.0% (2024: 25.0%) | (12.0) | (9.1) |
Amounts qualifying for tax relief and disallowed expenses | 1.6 | 1.0 |
Adjustments in respect of prior years | (0.5) | 2.2 |
Tax charge in the consolidated income statement | (10.9) | (5.9) |
Effective rate of tax | 22.6% | 16.2% |
| 2025 | 2024 | |
| £m | £m | |
| Tax in other comprehensive income | ||
Current tax – Retirement benefit assets | – | 1.2 |
Deferred tax – Retirement benefit obligations/assets and short-term temporary timing differences | 0.3 | (0.4) |
Tax credit in other comprehensive income | 0.3 | 0.8 |
| 2025 | 2024 | |
| £m | £m | |
| Deferred tax asset recognised | ||
Accelerated capital allowances | (0.4) | 1.0 |
Short-term temporary differences | 6.8 | 3.6 |
Retirement benefit assets | (15.0) | (13.7) |
Tax losses | 11.5 | 17.7 |
Deferred tax asset | 2.9 | 8.6 |
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Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
9 Taxation continued
| 2025 | 2024 | |
| £m | £m | |
| Analysis of deferred tax movements | ||
At 1 January | 8.6 | 11.8 |
| Deferred tax in consolidated income statement | ||
Accelerated capital allowances | (1.4) | (1.2) |
Short-term temporary differences | 2.4 | 2.0 |
Retirement benefit assets/obligations | (0.8) | – |
Tax losses | (6.2) | (3.6) |
(6.0) | (2.8) | |
| Deferred tax in other comprehensive income | ||
Retirement benefit assets | (0.5) | (0.4) |
Short-term temporary differences | 0.8 | – |
At 31 December | 2.9 | 8.6 |
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| £m | £m | £m | £m | |
Management expenses and charges incurred by Parent Company | 54.4 | 54.4 | 54.2 | 54.2 |
Capital losses | 270.6 | 270.6 | 241.0 | 241.0 |
128 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | |
| Number | Number | |
| (millions) | (millions) | |
Weighted average number of ordinary shares in issue for basic earnings per share calculation | 268.5 | 271.3 |
Dilutive potential ordinary shares arising from employee share schemes | 4.2 | 3.3 |
Weighted average number of ordinary shares in issue for diluted earnings per share calculation | 272.7 | 274.6 |
| Dividend per | 2025 | 2024 | |
| share pence | £m | £m | |
Final dividend for the year ended 31 December 2023 | 0.8 | – | 2.2 |
Interim dividend for the year ended 31 December 2024 | 0.4 | – | 1.1 |
Final dividend for the year ended 31 December 2024 | 2.0 | 5.3 | – |
Interim dividend for the year ended 31 December 2025 | 1.0 | 2.6 | – |
Amount recognised as distributions to equity holders in the year | 7.9 | 3.3 | |
Dividends settled in shares | (0.6) | (0.1) | |
Dividends settled in cash | 7.3 | 3.2 |
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Notes to the Financial Statements continued
| Customer | Other acquired | Other | |||
| Goodwill | relationships | intangibles | intangibles | Total | |
| Group | £m | £m | £m | £m | £m |
| Cost | |||||
At 1 January 2024 | 54.1 | 15.4 | 9.7 | 16.2 | 95.4 |
Additions | – | – | – | 5.8 | 5.8 |
Disposals | – | – | – | (7.6) | (7.6) |
At 31 December 2024 | 54.1 | 15.4 | 9.7 | 14.4 | 93.6 |
At 1 January 2025 | 54.1 | 15.4 | 9.7 | 14.4 | 93.6 |
Additions | – | – | – | 1.0 | 1.0 |
At 31 December 2025 | 54.1 | 15.4 | 9.7 | 15.4 | 94.6 |
| Accumulated amortisation and impairment | |||||
At 1 January 2024 | 9.0 | 15.4 | 9.7 | 15.6 | 49.7 |
Charge in year | – | – | – | 0.3 | 0.3 |
Disposals | – | – | – | (7.6) | (7.6) |
At 31 December 2024 | 9.0 | 15.4 | 9.7 | 8.3 | 42.4 |
At 1 January 2025 | 9.0 | 15.4 | 9.7 | 8.3 | 42.4 |
Charge in year | – | – | – | 1.1 | 1.1 |
At 31 December 2025 | 9.0 | 15.4 | 9.7 | 9.4 | 43.5 |
| Net book value | |||||
At 31 December 2025 | 45.1 | – | – | 6.0 | 51.1 |
At 31 December 2024 | 45.1 | – | – | 6.1 | 51.2 |
At 1 January 2024 | 45.1 | – | – | 0.6 | 45.7 |
130 Costain Group PLC | Annual Report and Accounts 2025
| Right-of-use assets | ||||||
| Leasehold | Plant and | Vehicles | Land and | Plant and | ||
| improvements | equipment | buildings | equipment | Total | ||
| Group | £m | £m | £m | £m | £m | £m |
| Cost | ||||||
At 1 January 2024 | – | 15.0 | 19.6 | 19.5 | 13.1 | 67.2 |
Additions | 8.2 | 0.1 | 8.9 | 7.3 | 2.3 | 26.8 |
Disposals | – | (7.1) | (5.7) | (10.9) | (9.8) | (33.5) |
At 31 December 2024 | 8.2 | 8.0 | 22.8 | 15.9 | 5.6 | 60.5 |
At 1 January 2025 | 8.2 | 8.0 | 22.8 | 15.9 | 5.6 | 60.5 |
Additions | 0.3 | 1.1 | 6.6 | 0.1 | 4.5 | 12.6 |
Disposals | – | (0.1) | (4.0) | (2.1) | (4.9) | (11.1) |
At 31 December 2025 | 8.5 | 9.0 | 25.4 | 13.9 | 5.2 | 62.0 |
| Accumulated depreciation and impairment | ||||||
At 1 January 2024 | – | 14.6 | 9.0 | 9.8 | 7.0 | 40.4 |
Charge in year | 0.2 | 0.2 | 6.1 | 2.8 | 2.6 | 11.9 |
Disposals | – | (7.1) | (5.6) | (8.3) | (6.1) | (27.1) |
At 31 December 2024 | 0.2 | 7.7 | 9.5 | 4.3 | 3.5 | 25.2 |
At 1 January 2025 | 0.2 | 7.7 | 9.5 | 4.3 | 3.5 | 25.2 |
Charge in year | 1.1 | 0.1 | 6.9 | 1.8 | 1.9 | 11.8 |
Disposals | – | (0.1) | (4.0) | (1.8) | (3.6) | (9.5) |
At 31 December 2025 | 1.3 | 7.7 | 12.4 | 4.3 | 1.8 | 27.5 |
| Net book value | ||||||
| At 31 December 2025 | 7.2 | 1.3 | 13.0 | 9.6 | 3.4 | 34.5 |
At 31 December 2024 | 8.0 | 0.3 | 13.3 | 11.6 | 2.1 | 35.3 |
At 1 January 2024 | – | 0.4 | 10.6 | 9.7 | 6.1 | 26.8 |
| 2025 | 2024 | |
| £m | £m | |
Interest expense (included in finance expense) | 2.4 | 2.5 |
Expense relating to short-term leases (included in cost of sales and administrative expenses) | 24.9 | 42.6 |
| 2025 | 2024 | |
| £m | £m | |
Current | 8.5 | 13.0 |
Non-current | 16.5 | 12.8 |
25.0 | 25.8 |
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Notes to the Financial Statements continued
Investments in joint ventures | £m |
| Cost | |
At 1 January 2024 | 20.9 |
At 31 December 2024 | 20.9 |
At 1 January 2025 | 20.9 |
At 31 December 2025 | 20.9 |
| Share of post-acquisition reserves | |
At 1 January 2024 | (14.0) |
At 31 December 2024 | (14.0) |
At 1 January 2025 | (14.0) |
Loss for the year | (0.4) |
At 31 December 2025 | (14.4) |
| Accumulated impairment | |
At 1 January 2024 | (6.5) |
At 31 December 2024 | (6.5) |
At 1 January 2025 | (6.5) |
At 31 December 2025 | (6.5) |
| Net book value | |
At 31 December 2025 | – |
At 31 December 2024 | 0.4 |
At 1 January 2024 | 0.4 |
132 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | |
| Joint ventures | Joint ventures | |
| £m | £m | |
Revenue | – | 0.1 |
Loss before tax | (0.4) | – |
Taxation | – | – |
Loss for the year | (0.4) | – |
Non-current assets | – | – |
Trade and other receivables | – | 0.7 |
Cash and cash equivalents | 0.2 | 0.1 |
Trade and other payables – current | (0.2) | (0.4) |
Non-current liabilities | – | – |
Investments in joint ventures and associates | – | 0.4 |
Dividends received by Group | – | – |
| 2025 | 2024 | |
| Joint ventures | Joint ventures | |
| £m | £m | |
Revenue | – | 0.2 |
Loss before tax | (1.0) | – |
Taxation | – | – |
Loss for the year | (1.0) | – |
Non-current assets | – | – |
Trade and other receivables | – | 1.5 |
Cash and cash equivalents | 0.4 | 0.2 |
Trade and other payables – current | (0.4) | (0.7) |
Non-current liabilities | – | – |
Equity | – | 1.0 |
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Notes to the Financial Statements continued
14 Investments in subsidiaries, equity accounted joint ventures and associates continued
Investments in subsidiaries | £m |
| Cost | |
At 1 January 2024 | 429.3 |
Additions | 2.3 |
At 31 December 2024 | 431.6 |
At 1 January 2025 | 431.6 |
Additions | 3.1 |
At 31 December 2025 | 434.7 |
Amounts written off At 1 January 2024 | (273.7) |
At 31 December 2024 | (273.7) |
At 1 January 2025 | (273.7) |
At 31 December 2025 | (273.7) |
| Net book value | |
At 31 December 2025 | 161.0 |
At 31 December 2024 | 157.9 |
At 1 January 2024 | 155.6 |
| 2025 | 2024 | |
| £m | £m | |
Contract assets | 90.0 | 84.0 |
Contract liabilities | (23.5) | (56.2) |
134 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | |
| £m | £m | |
| Aggregate amount of the transaction price allocated to long-term | ||
contracts that are partially or fully unsatisfied as at 31 December | 4,096.0 | 2,099.7 |
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| £m | £m | £m | £m | |
| Amounts included in current assets | ||||
Trade receivables | 54.1 | 54.6 | – | – |
Other receivables | 28.4 | 20.6 | 0.2 | – |
Contract assets | 90.0 | 84.0 | – | – |
Prepayments | 19.0 | 26.1 | 1.0 | 0.6 |
191.5 | 185.3 | 1.2 | 0.6 | |
| Amounts included in non-current assets | ||||
Trade receivables | 2.3 | 4.3 | – | – |
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| £m | £m | £m | £m | |
Cash and cash equivalents | 189.3 | 158.5 | 108.1 | 77.5 |
Cash and cash equivalents in the cash flow statement | 189.3 | 158.5 | 108.1 | 77.5 |
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| £m | £m | £m | £m | |
Cash and cash equivalents – with restrictions | 26.0 | 38.4 | – | – |
Cash and cash equivalents – with restrictions in the cash flow statement | 26.0 | 38.4 | – | – |
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Notes to the Financial Statements continued
17 Cash and cash equivalents, loans and borrowings continued
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| £m | £m | £m | £m | |
Cash and cash equivalents (including cash with restrictions) | 215.3 | 196.9 | 108.1 | 77.5 |
Less cash and cash equivalents – with restrictions | (26.0) | (38.4) | – | – |
Net cash before lease liabilities | 189.3 | 158.5 | 108.1 | 77.5 |
Lease liabilities (note 13) | (25.0) | (25.8) | – | – |
Net cash | 164.3 | 132.7 | 108.1 | 77.5 |
| Cash and cash | ||||
| equivalents | Less cash and cash | |||
| (including cash with | equivalents – with | |||
| restrictions) | restrictions | Lease liabilities | Total | |
| Group | £m | £m | £m | £m |
Net cash/(debt) at 1 January 2024 | 188.8 | (24.4) | (24.3) | 140.1 |
Cash flows | 8.1 | (14.0) | 11.3 | 5.4 |
New leases | – | – | (18.5) | (18.5) |
Disposal of leases | – | – | 5.7 | 5.7 |
Interest expense | – | – | (2.5) | (2.5) |
Interest payments (presented as operating cash flows) | – | – | 2.5 | 2.5 |
Net cash/(debt) at 31 December 2024 | 196.9 | (38.4) | (25.8) | 132.7 |
Net cash/(debt) at 1 January 2025 | 196.9 | (38.4) | (25.8) | 132.7 |
Cash flows | 18.4 | 12.4 | 10.8 | 41.6 |
New leases | – | – | (11.2) | (11.2) |
Disposal of leases | – | – | 1.2 | 1.2 |
Interest expense | – | – | (2.4) | (2.4) |
Interest payments (presented as operating cash flows) | – | – | 2.4 | 2.4 |
Net cash/(debt) at 31 December 2025 | 215.3 | (26.0) | (25.0) | 164.3 |
| Cash and cash | |
| equivalents | |
| Company | £m |
Net cash at 1 January 2024 | 81.8 |
Cash flows | (4.3) |
Net cash at 31 December 2024 | 77.5 |
Net cash at 1 January 2025 | 77.5 |
Cash flows | 30.6 |
Net cash at 31 December 2025 | 108.1 |
136 Costain Group PLC | Annual Report and Accounts 2025
18 Financial instruments – Fair values and risk management
| Group and Company | ||
| 2025 | 2024 | |
| £m | £m | |
Expiring between one and five years | 295.0 | 270.0 |
Element of above facilities available for borrowings | – | – |
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Notes to the Financial Statements continued
18 Financial instruments – Fair values and risk management continued
Risk management continued
c) Credit risk cont in ued
| Less than | 60 to 120 days | More than 120 days | |||
| Current | 60 days past due | past due | past due | Total | |
| 31 December 2025 | |||||
| Group 1 | |||||
Expected loss rate | 0.00% | 0.10% | 0.25% | 0.50% | |
£m | £m | £m | £m | £m | |
Trade receivables | 34.3 | 11.7 | 2.8 | 4.8 | 53.6 |
Contract assets | 70.0 | 12.7 | 1.1 | 6.2 | 90.0 |
Loss allowance | – | – | – | – | – |
| Group 2 | |||||
Expected loss rate | 1.0% | 2.0% | 15.0% | 30.0% | |
£m | £m | £m | £m | £m | |
Trade receivables | 0.2 | 0.2 | 0.1 | – | 0.5 |
Contract assets | – | – | – | – | – |
Loss allowance | – | – | – | – | – |
| 31 December 2024 | |||||
| Group 1 | |||||
Expected loss rate | 0.00% | 0.10% | 0.25% | 0.50% | |
£m | £m | £m | £m | £m | |
Trade receivables | 40.5 | 13.4 | 0.1 | 0.3 | 54.3 |
Contract assets | 60.8 | 13.6 | 2.5 | 7.1 | 84.0 |
Loss allowance | – | – | – | – | – |
| Group 2 | |||||
Expected loss rate | 1.0% | 2.0% | 15.0% | 30.0% | |
£m | £m | £m | £m | £m | |
Trade receivables | 0.1 | 0.2 | – | – | 0.3 |
Contract assets | – | – | – | – | – |
Loss allowance | – | – | – | – | – |
138 Costain Group PLC | Annual Report and Accounts 2025
2025 | 2024 | |||||||
| Between | Between | |||||||
| Within | one and | After five | Within | one and | After five | |||
| Total | one year | five years | years | Total | one year | five years | years | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
| Cash and cash equivalents: | ||||||||
Pounds sterling | 189.2 | 189.2 | – | – | 158.2 | 158.2 | – | – |
Other | 0.1 | 0.1 | – | – | 0.3 | 0.3 | – | – |
189.3 | 189.3 | – | – | 158.5 | 158.5 | – | – | |
Cash and cash equivalents – with restrictions: | ||||||||
Pounds sterling | 26.0 | 26.0 | – | – | 38.4 | 38.4 | – | – |
26.0 | 26.0 | – | – | 38.4 | 38.4 | – | – | |
| Trade and other receivables: | ||||||||
Pounds sterling | 84.8 | 82.5 | 2.3 | – | 79.5 | 75.2 | 4.3 | – |
| Insurance recovery asset: | ||||||||
Pounds sterling | 4.3 | 4.3 | – | – | 8.8 | 8.8 | – | – |
89.1 | 86.8 | 2.3 | – | 88.3 | 84.0 | 4.3 | – | |
| Total financial assets not measured | ||||||||
at fair value | 304.4 | 302.1 | 2.3 | – | 285.2 | 280.9 | 4.3 | – |
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Notes to the Financial Statements continued
18 Financial instruments – Fair values and risk management continued
Financial assets and liabilities continued
2025 | 2024 | |||||
| Between | Between | |||||
| Within | one and | Within | one and | |||
| Total | one year | five years | Total | one year | five years | |
| £m | £m | £m | £m | £m | £m | |
Lease liabilities – pounds sterling | 25.0 | 8.5 | 16.5 | 25.8 | 13.0 | 12.8 |
Trade payables and amounts owed to joint ventures and associates – pounds sterling | 47.7 | 46.6 | 1.1 | 47.3 | 45.5 | 1.8 |
Total financial liabilities not measured at fair value | 72.7 | 55.1 | 17.6 | 73.1 | 58.5 | 14.6 |
2025 | 2024 | |||
| Current | Non-current | Current | Non-current | |
| £m | £m | £m | £m | |
Trade and other receivables (as above) | 86.8 | 2.3 | 84.0 | 4.3 |
Contract assets | 90.0 | – | 84.0 | – |
Prepayments | 19.0 | – | 26.1 | – |
195.8 | 2.3 | 194.1 | 4.3 |
2025 | 2024 | |||
| Current | Non-current | Current | Non-current | |
| £m | £m | £m | £m | |
Trade and other payables (as above) | 46.6 | 1.1 | 45.5 | 1.8 |
Social security | 8.9 | – | 8.8 | – |
Other payables | 47.8 | – | 21.0 | – |
Contract liabilities | 23.5 | – | 56.2 | – |
Accruals and deferred income | 140.6 | – | 139.5 | – |
267.4 | 1.1 | 271.0 | 1.8 |
140 Costain Group PLC | Annual Report and Accounts 2025
2025 | 2024 | |
Cash and cash equivalents | 0.00% to 4.72% | 0.00% to 5.05% |
Type | Valuation technique | Significant unobservable inputs |
Other financial liabilities (as above) | Discounted cash flow | Not applicable |
Group | Company | |||
| 2025 | 2024 | 2025 | 2024 | |
| £m | £m | £m | £m | |
| Current liabilities | ||||
Trade payables | 46.6 | 45.3 | – | – |
Other payables | 47.8 | 21.0 | 0.1 | 0.1 |
Social security | 8.9 | 8.8 | – | – |
Contract liabilities | 23.5 | 56.2 | – | – |
Accruals and deferred income | 140.6 | 139.5 | 0.4 | 0.5 |
Amounts owed to joint ventures and associates | – | 0.2 | – | – |
Amounts owed to subsidiary undertakings | – | – | 60.4 | 46.0 |
267.4 | 271.0 | 60.9 | 46.6 | |
| Non-current liabilities | ||||
Trade payables | 1.1 | 1.8 | – | – |
1.1 | 1.8 | – | – |
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Notes to the Financial Statements continued
| Rectification | |||
| provision | Other | Total | |
| Group | £m | £m | £m |
| Current | |||
At 1 January 2024 | 11.6 | 2.7 | 14.3 |
Provided | 2.6 | 6.6 | 9.2 |
Utilised | (8.4) | (0.1) | (8.5) |
Released | – | (2.1) | (2.1) |
At 31 December 2024 | 5.8 | 7.1 | 12.9 |
At 1 January 2025 | 5.8 | 7.1 | 12.9 |
Provided | 5.4 | 0.7 | 6.1 |
Utilised | (7.7) | (0.4) | (8.1) |
Released | – | (1.0) | (1.0) |
At 31 December 2025 | 3.5 | 6.4 | 9.9 |
| Funding | |
| obligations | |
| Company | £m |
| Current | |
At 1 January 2024 | 0.1 |
Reclassified from non-current | 0.1 |
Utilised | (0.1) |
At 31 December 2024 | 0.1 |
At 1 January 2025 | 0.1 |
At 31 December 2025 | 0.1 |
| Non-current | |
At 1 January 2024 | 0.6 |
Reclassified to current | (0.1) |
At 31 December 2024 | 0.5 |
At 1 January 2025 | 0.5 |
At 31 December 2025 | 0.5 |
142 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | 2023 | |
| £m | £m | £m | |
Present value of defined benefit obligations | (491.0) | (497.5) | (542.6) |
Fair value of scheme assets | 551.0 | 552.4 | 596.1 |
Recognised asset for defined benefit obligations | 60.0 | 54.9 | 53.5 |
143
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
| 2025 | 2024 | |
| Movements in present value of defined benefit obligations | £m | £m |
At 1 January | 497.5 | 542.6 |
Interest cost | 26.4 | 25.0 |
Remeasurements – demographic assumptions | (14.0) | 0.5 |
Remeasurements – financial assumptions | (6.0) | (41.0) |
Remeasurements – experience adjustments | 20.3 | 3.7 |
Benefits paid | (33.2) | (33.3) |
At 31 December | 491.0 | 497.5 |
| 2025 | 2024 | |
| Movements in fair value of scheme assets | £m | £m |
At 1 January | 552.4 | 596.1 |
Interest income | 29.4 | 27.6 |
Remeasurements – return on assets | 2.4 | (39.9) |
Contributions by employer | – | 2.0 |
Administrative expenses | – | (0.1) |
Benefits paid | (33.2) | (33.3) |
At 31 December | 551.0 | 552.4 |
| 2025 | 2024 | |
| Expense recognised in the income statement | £m | £m |
Administrative expenses paid by the pension scheme | – | (0.1) |
Administrative expenses paid directly by the Group | (2.3) | (1.8) |
Interest income on the net assets of the defined benefit pension scheme | 3.0 | 2.6 |
0.7 | 0.7 |
| 2025 | 2024 | |
| Fair value of scheme assets | £m | £m |
Global equities | 90.8 | 90.0 |
Multi-asset growth funds | 22.6 | 20.7 |
Multi-credit fund | 80.6 | 83.8 |
LDI plus collateral | 345.1 | 339.7 |
Cash | 11.9 | 18.2 |
551.0 | 552.4 |
21 Employee benefits continued
Pensions continued
Defined benefit scheme continued
144 Costain Group PLC | Annual Report and Accounts 2025
| 2025 | 2024 | 2023 | |
| Principal actuarial assumptions (expressed as weighted averages) | % | % | % |
Discount rate | 5.45 | 5.50 | 4.75 |
Future pension increases | 2.75 | 2.95 | 2.90 |
Inflation assumption | 2.85 | 3.10 | 3.05 |
2025 | 2024 | |||
| Male | Female | Male | Female | |
| (years) | (years) | (years) | (years) | |
Currently aged 65 | 21.3 | 23.3 | 21.9 | 23.8 |
Non-retirees currently aged 45 | 22.1 | 24.1 | 22.9 | 25.1 |
| Pension liability | Pension cost | |
| £m | £m | |
| Increasing the discount rate by 0.25%, decreases pension liability | ||
and increases pension income/reduces pension cost by Decreasing inflation by 0.25% (which reduces pension increases), decreases | 11.9 | 0.6 |
pension liability and increases pension income/reduces pension cost by Increasing life expectancy by one year, increases pension liability | 8.7 | 0.5 |
and reduces pension income/increases pension cost by | 19.5 | 1.1 |
145
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
21 Employee benefits continued
146 Costain Group PLC | Annual Report and Accounts 2025
LTIP | AIP | SAYE | ||
| Weighted average | ||||
| Number | Number | Number | exercise price | |
| (m) | (m) | (m) | (p) | |
Outstanding at 1 January 2024 | 13.6 | 3.4 | 4.9 | 50.0 |
Forfeited during the year | (1.4) | (0.1) | (0.4) | 51.1 |
Exercised during the year | (0.7) | (1.9) | – | 50.0 |
Granted during the year | 3.0 | 1.5 | 4.0 | 81.2 |
Outstanding at 31 December 2024 | 14.5 | 2.9 | 8.5 | 64.8 |
Outstanding at 1 January 2025 | 14.5 | 2.9 | 8.5 | 64.8 |
Forfeited during the year | (1.9) | (0.3) | (0.4) | 62.2 |
Exercised during the year | (2.2) | (1.2) | – | – |
Granted during the year | 2.5 | 1.3 | 3.1 | 102.0 |
Outstanding at 31 December 2025 | 12.9 | 2.7 | 11.2 | 75.1 |
Exercisable at the end of the period | 3.5 | 0.3 | – | – |
2025 | 2024 | |
Expected volatility | 39.2% | 43.9% |
Expected life (years) | 3.5 | 3.5 |
Risk-free interest rate | 3.9% | 3.9% |
Expected dividend yield | 2.1% | 1.2% |
147
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
2025 | 2024 | |||
| Number | Nominal value | Number | Nominal value | |
| (millions) | £m | (millions) | £m | |
| Issued share capital | ||||
| Shares in issue at beginning of year – ordinary shares of one pence | ||||
each, fully paid (2024: 50 pence each) | 268.8 | 2.7 | 276.7 | 138.3 |
Issued in year (see below) | 4.3 | – | 1.8 | 0.9 |
Nominal value reduction | – | – | – | (136.4) |
Share buyback | (6.4) | – | (9.7) | (0.1) |
| Shares in issue at end of year – | ||||
ordinary shares of one pence each, fully paid | 266.7 | 2.7 | 268.8 | 2.7 |
148 Costain Group PLC | Annual Report and Accounts 2025
| Registered | |||
| Percentage of | office/principal | ||
| Activity | equity held | place of business | |
| Principal subsidiary undertakings | |||
Costain Limited | Engineering, Construction and Maintenance | 100 | (1) |
Costain Engineering & Construction Limited | Holding and Service Company | 100 | (1) |
Costain Engineering Limited | Engineering | 100 | (1) |
Costain Oil, Gas & Process Limited | Process Engineering | 100 | (1) |
Richard Costain Limited | Service Company | 100 | (1) |
| Percentage | Country of | ||
| Activity | interest | business | |
| Major joint operations | |||
CH2M-Costain Joint Venture – Area 14 M&R contract | Engineering and Maintenance | 50 | UK |
Costain-Atkins-Black & Veatch Joint Venture – Thames Water AMP6 | Engineering | 70 | UK |
Costain-MWH Joint Venture – Southern Water | Civil Engineering | 50 | UK |
CVB Joint Venture – Thames Tideway Tunnel East | Civil Engineering | 40 | UK |
Galliford-Costain-Atkins Joint Venture – United Utilities | Engineering | 42.5 | UK |
Skanska-Costain-Strabag S2 Joint Venture – HS2 Main Works | Rail Engineering | 34 | UK |
The ASP Batch Joint Venture – Severn Trent – Large capital schemes outside AMP6 | Engineering | 33.3 | UK |
149
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
24 Subsidiary undertakings, joint ventures, associates and joint operations continued
| Registered | |||
| Percentage of | office/principal | ||
| Status | equity held | place of business | |
| Other subsidiaries owned directly by Costain Group PLC | |||
Costain Civil Engineering Limited | Holding Company | 100 | (1) |
Costain Investments Limited | Dormant | 100 | (7) |
Costain USA Inc. | Holding Company | 100 | (5) |
County & District Properties Limited 1 | Trading | 100 | (1) |
Renown Investments (Holdings) Limited 1 | Trading | 100 | (1) |
Lysander Services Limited 1 | Trading | 100 | (1) |
| Other subsidiaries owned indirectly by Costain Group PLC | |||
Brunswick Infrastructure Services Limited | Dissolved August 2025 | 100 | (1) |
Calvert & Russell Limited 1 | Dormant | 100 | (1) |
CLM Engineering (Overseas) Limited | Dissolved August 2025 | 100 | (1) |
COGAP (Middle East) Limited 1 | Holding Company | 100 | (1) |
Construction Study Centre Limited 1 | Dormant | 100 | (1) |
Costain Alcaidesa Limited | Dissolved August 2025 | 100 | (1) |
Costain America Inc. | Holding Company | 100 | (5) |
Costain Building & Civil Engineering Limited 1 | Holding Company | 100 | (1) |
Costain Construction Limited | Dissolved December 2025 | 100 | (1) |
Costain de Venezuela CA | Dormant | 100 | (13) |
Costain Energy Solutions Limited 1 | Dormant | 100 | (1) |
Costain Engineering & Construction (Overseas) Limited 1 | Holding Company | 100 | (1) |
Costain Engineering Services Inc. | Dormant | 100 | (5) |
Costain Integrated Services Limited 1 | Trading | 100 | (1) |
Costain Integrated Technology Solutions Limited 1 | Trading | 100 | (1) |
Costain International Limited | Dissolved August 2025 | 100 | (1) |
Costain Management Design Limited | Dissolved August 2025 | 100 | (1) |
Costain Minerals Inc. | Dormant | 100 | (5) |
Costain Mining Services Inc. | Dormant | 100 | (5) |
Costain Oil, Gas & Process (Nigeria) Limited | Dormant | 95 | (14) |
Costain Oil, Gas & Process (Overseas) Limited 1 | Dormant | 100 | (1) |
Costain Process Construction Limited | Dissolved August 2025 | 100 | (1) |
Costain Upstream Limited 1 | Trading | 100 | (2) |
Promanex (Civils & Industrial Services) Limited | Dissolved August 2025 | 100 | (1) |
Promanex (Construction & Maintenance Services) Limited | Dissolved August 2025 | 100 | (1) |
Promanex (Total FM & Environmental Services) Limited | Dissolved August 2025 | 100 | (1) |
Sunland Mining Corporation (II) | Dormant | 100 | (5) |
Westminster Plant Co. Limited | Dissolved August 2025 | 100 | (1) |
150 Costain Group PLC | Annual Report and Accounts 2025
| Registered | |||
| Percentage of | office/principal place | ||
| Status | equity held | of business | |
| Other joint ventures or associates owned indirectly by Costain Group PLC | |||
4Delivery Limited | Trading | 40 | (3) |
ABC Electrification Ltd | In strike off | 33.3 | (6) |
ACM Health Solutions Limited | Dormant | 33.3 | (4) |
Brighton & Hove 4Delivery Limited | Trading | 49 | (3) |
Budimex & Costain SP ZO.O | Dormant | 50 | (12) |
Costain Abu Dhabi Co WLL | Dormant | 49 | (8) |
China Harbour-Costain Mexico S de RL de CV | Dormant | 50 | (11) |
Jalal Costain WLL | Dormant | 49 | (9) |
Nesma-Costain Process Co. Limited | Dormant | 50 | (10) |
| Percentage | Country | ||
| Activity | interest | of business | |
| Other joint operations, including completed | |||
| ACTUS Joint Venture – Trawsfynydd nuclear power station | |||
active waste retrieval | Civil Engineering | 25 | UK |
Alstom-Babcock-Costain Joint Venture – Edinburgh to Glasgow Rail Improvement Programme | Rail Engineering | 33.3 | UK |
Alstom-Costain C644 Joint Venture – Traction power – Crossrail | Rail Engineering | 32.5 | UK |
Alstom-Costain C650 Joint Venture – HV power supply – Crossrail | Rail Engineering | 32.5 | UK |
A-one+ Joint Venture - ASC area 12 - Highways England | Engineering and Maintenance | 33.3 | UK |
A-one+ Integrated Highway Services – MAC 7 | Engineering and Maintenance | 33.3 | UK |
A-one+ Integrated Highway Services – MAC 12 | Engineering and Maintenance | 33.3 | UK |
A-one+ Integrated Highway Services – MAC 14 | Engineering and Maintenance | 33.3 | UK |
A-one+ Joint Venture – ASC area 4 – Highways England | Engineering and Maintenance | 33.3 | UK |
ATC Joint Venture – C610 – Crossrail | Rail Engineering | 32.5 | UK |
ATC Joint Venture – C695 – Crossrail | Rail Engineering | 32.5 | UK |
| Balfour Beatty-BmJV-Carillion-Costain Joint Venture – | |||
National Major Projects – Highways England | Civil Engineering | 29 | UK |
| CosMott Joint Venture – Devonport Major Infrastructure | |||
Programme – Construction Delivery Partner | Consultancy | 50 | UK |
Costain Arup Joint Venture – Yorkshire Water | Consultancy | 50 | UK |
Costain-CH2M UK – ESCC JV – East Sussex highway maintenance | Engineering and Maintenance | 50 | UK |
| Costain-Dalekovod Joint Venture – National Grid HV Overhead | |||
Line System | Engineering | 60 | UK |
Costain-Galliford Try Joint Venture - M1 smart motorways | Civil Engineering | 50 | UK |
Costain-Hochtief Joint Venture – Reading station | Civil Engineering | 50 | UK |
Costain-Laing O’Rourke Joint Venture – Bond Street station | Civil Engineering | 50 | UK |
Costain-Skanska C336 Joint Venture – Paddington New Yard – Crossrail | Civil Engineering | 50 | UK |
Costain-Skanska C360 Joint Venture – Eleanor Street – Crossrail | Civil Engineering | 50 | UK |
Costain-Skanska C405 Joint Venture – Paddington – Crossrail | Civil Engineering | 50 | UK |
Costain-Skanska C412 Joint Venture – Bond Street – Crossrail | Civil Engineering | 50 | UK |
Costain-Skanska – HS2 Enabling works | Civil Engineering | 50 | UK |
Costain-Skanska Joint Venture – A14 Ellington to Fen Ditton | Civil Engineering | 50 | UK |
Costain-Skanska Joint Venture – Balfour Beatty Joint Venture – A14 | Civil Engineering | 33.3 | UK |
Costain-Skanska Joint Venture – NGT Tunnels, London | Civil Engineering | 52.6 | UK |
| Costain-Skanska Joint Venture – Paddington Station Bakerloo Line Link | |||
Project | Civil Engineering | 50 | UK |
Costain-Vinci Construction Joint Venture – Shieldhall | Civil Engineering | 50 | UK |
Costain-Vinci Joint Venture – M4 corridor around Newport | Civil Engineering | 50 | UK |
151
Strategic ReportOverview Governance Financial Statements
Notes to the Financial Statements continued
| Country | |||
Activity | Percentage interest | of business | |
| Other joint operations, including completed continued | |||
| Key to registered office/principal place of business | ||
| (1) Seventh Floor, 70 St Mary Axe, London EC3A 8BE, England | ||
| (2) Neo House, Riverside, Aberdeen AB11 7LH, Scotland | ||
(3) | 210 | Pentonville Road, London N1 9JY, England |
| (4) Booths Park, Chelford Road, Knutsford WA16 8QZ, England | ||
| (5) | The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 (New Castle County), USA | |
| (6) Alstom, Litchurch Lane, Derby DE24 8AD, England | ||
(7) | P.O.Box N-7768, Bank Lane, Nassau, Bahamas | |
| (8) Dormant company – Abu Dhabi, UAE, no record of address | ||
| (9) Flat 33, Building 232, Road 18, Block 321, Manama, Bahrain | ||
(10) | P.O.Box 6967, 21452, | Jeddah, Saudi Arabia |
(11) | Calle Delfines No. 268 – 2, Frac. Playa Ensenada, Ensenada, B.C., CP. 22880, Mexico | |
| (12) Marszałkowska 82, Warsaw, Mazowieckie, 00–517, Poland | ||
| (13) Dormant company – Venezuela, no record of address | ||
| (14) Dormant company – Nigeria, no record of address | ||
24 Subsidiary undertakings, joint ventures, associates and joint operations continued
152 Costain Group PLC | Annual Report and Accounts 2025
2025 | 2024 | |||||
| Joint ventures | Joint | Joint ventures | Joint | |||
| and associates | operations | Total | and associates | operations | Total | |
| £m | £m | £m | £m | £m | £m | |
Joint operations revenue | – | 4 2 3 . 3 | 4 2 3 . 3 | – | 545.2 | 545.2 |
Services of Group employees | – | 86.8 | 86.8 | – | 86.7 | 86.7 |
Construction services and materials | – | 18.4 | 18.4 | – | 18.4 | 18.4 |
– | 528.5 | 528.5 | – | 650.3 | 650.3 |
| Group | ||
| 2025 | 2024 1 | |
| £m | £m | |
Directors’ emoluments | 2.0 | 2.2 |
Executive officers’ emoluments | 3.5 | 2.2 |
Post-employment benefits | 0.2 | 0.2 |
Termination benefits | – | – |
Share-based payments | 2.0 | 2.0 |
7.7 | 6.6 |
26 Events after the reporting date
There are no events after the reporting date.
153
Strategic ReportOverview Governance Financial Statements
Costain Group PLC | Annual Report and Accounts 2025154
Five-Year Financial Summary
2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
Revenue and profit
Revenue 1,045.7 1,251.1 1,332.0 1,421.4 1,135.2
Contract adjustments – – – – 43.4
Adjusted revenue 1,045.7 1,251.1 1,332.0 1,421.4 1,178.6
Adjusted operating profit 47.1 43.1 40.1 36.3 30.1
Adjusting items – contract adjustments – – – – (39.2)
Adjusting items – other (2.3) (12.0) (13.3) (1.4) (0.4)
Operating profit/(loss) 44.8 31.1 26.8 34.9 (9.5)
Share of results of joint ventures and associates (0.4) – – – –
Profit/(loss) from operations 44.4 31.1 26.8 34.9 (9.5)
Finance income 8.0 9.3 8.0 1.8 0.1
Finance expense (4.2) (3.9) (3.9) (3.9) (3.9)
Net finance income/(expense) 3.8 5.4 4.1 (2.1) (3.8)
Profit/(loss) before tax 48.2 36.5 30.9 32.8 (13.3)
Taxation (10.9) (5.9) (8.8) (6.9) 7.5
Profit/(loss) for the year attributable to equity holders of the Parent 37.3 30.6 22.1 25.9 (5.8)
Earnings/(loss) per share – basic 13.9p 11.3p 8.1p 9.4p (2.1)p
Earnings/(loss) per share – diluted 13.7p 11.1p 7.8p 9.4p (2.1)p
Dividends per ordinary share
Final 3.2p 2.0p 0.8p – –
Interim 1.0p 0.4p 0.4p – –
Summarised consolidated statement of financial position
Intangible assets 51.1 51.2
45.7 52.2 52.5
Property, plant and equipment 34.5 35.3 26.8 32.0 32.0
Investments in and loans to equity accounted joint ventures
and associates – 0.4 0.4 0.4 0.4
Retirement benefit asset 60.0 54.9 53.5 60.2 67.1
Other non-current assets 5.2 12.9 17.7 22.0 20.9
Total non-current assets 150.8 154.7 144.1 166.8 172.9
Current assets 411.1 392.5 398.1 320.8 359.5
Total assets 561.9 547.2 542.2 487.6 532.4
Current liabilities 286.1 296.9 306.6 253.1 281.4
Retirement benefit obligations – – – – –
Other non-current liabilities 17.6 14.6 16.2 23.3 52.0
Total liabilities 303.7 311.5 322.8 276.4 333.4
Equity attributable to equity holders of the Parent 258.2 235.7 219.4 211.2 199.0
Financial Calendar and Other Shareholder Information
Financial calendar
1
Full-year results 2025 10 March 2026
Annual General Meeting 14 May 2026
Final Dividend payment date
2
26 May 2026
Half-year end 2026 30 June 2026
Half-year results 2026 13 August 2026
Financial year-end 2026 31 December 2026
1
The financial calendar may be updated from time to time throughout the year. Please refer to the Investors section of our website at www.costain.com for up-to-date details.
2
Subject to shareholder approval at the Annual General Meeting to be held on 14 May 2026.
Scrip dividend scheme
Subject to shareholder approval of the final dividend and renewal of the scrip dividend scheme at the 2026 Annual General Meeting, a
scrip dividend scheme will be offered in respect of the final dividend. Those shareholders who have already elected to join the scheme
will automatically have their dividend sent to them in this form.
Shareholders wishing to join the scheme for all future dividends should return a completed mandate form to the Registrar, EQ. Copies of
the mandate form and the scrip dividend brochure can be downloaded from the Company’s website at www.costain.com or obtained
from EQ by telephoning +44 (0)371 384 2268
1
(please use the country code if calling from outside the UK).
Dividend mandate
Shareholders can arrange to have their dividends paid directly into their bank or building society account, by completing a bank mandate
form. The advantages of using this service are:
• the payment is more secure as you can avoid the risk of cheques becoming lost in the post;
• it avoids paying in a cheque; and
• there is no risk of stolen or out-of-date cheques.
A mandate form can be obtained from the Company’s website, or by contacting EQ on +44 (0)371 384 2250
1
(please use the country
code if calling from outside the UK) and can also be obtained via the shareholder website at www.shareview.co.uk (see overleaf for
further details). Overseas shareholders can arrange for their dividends to be paid in their local currency and more information can be
obtained from www.shareview.co.uk/overseas.
Analysis of shareholders
as at 5 March 2026
Total number
of holdings
Percentage
of holders
Total number
of shares
Percentage
of issued capital
Shareholdings 100,000 and more 161 2.17 256,996,958 96.35
Shareholdings 50,000–99,999 43 0.58 2,944,674 1.10
Shareholdings 25,000–49,999 44 0.59 1,509,473 0.57
Shareholdings 5,000–24,999 275 3.70 2,845,896 1.07
Shareholdings 1–4,999 6,906 92.96 2,417,894 0.91
Totals 7,429 100 266,714,895 100
Secretary
Nicole Geoghegan
Registered Office
Telephone 020 3922 0600
www.costain.com
Company Number 1393773
Lines are open Monday to Friday 08.30am to 5.30pm, excluding public holidays in England and Wales.
155Strategic ReportOverview Governance Financial Statements
156 Costain Group PLC | Annual Report and Accounts 2025
Registrar
EQ, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.
Telephone +44 (0)371 384 2250
1
(please use the country code if calling from outside the UK).
Website
www.shareview.co.uk
Shareview service
The Shareview service from our registrar, EQ, allows shareholders to manage their shareholding online, giving:
• direct access to data held on their behalf on the share register including recent share movements, indicative valuations and dividend
details; and
• the ability to change their address or dividend payment instructions online.
To sign up for Shareview you need the Shareholder Reference Number printed on your notice of availability, proxy form or dividend
stationery. There is no charge to register.
When you register with the site, at www.shareview.co.uk, you can register your preferred format (post or email) for shareholder
communications. If you select email as your mailing preference, you will be notified of various shareholder communications, such as
annual results, by email instead of post.
When dividends are paid, if you have them paid straight to your bank account, and you have selected email as your mailing preference,
you can also collect your ‘dividend tax confirmation’ electronically. Instead of receiving the paper ‘dividend tax confirmation’, you will be
contacted by email with details of how to download your electronic version. Visit the website at www.shareview.co.uk for more details.
Details of software and equipment requirements are given on the website.
Bereavement services
In the event of the death of a shareholder the next of kin or administrator of the estate should contact our registrar, EQ. EQ have a
Designated Bereavement Services Helpline on +44 (0)371 384 2793
1
(please use the country code if calling from outside the UK).
You will be asked to supply a certified copy or the original of the death certificate, together with an appropriate authority to deal
with the estate, such as a Grant of Probate.
Further information is available on www.shareview.co.uk
Unsolicited mail
The Company is legally obliged to make its share register available to the general public. Consequently, some shareholders may receive
unsolicited mail, including correspondence from unauthorised investment firms. Shareholders who wish to limit the amount of unsolicited
mail they receive can contact The Mailing Preference Service at www.mpsonline.org.uk or on 0207 291 3310.
Further guidance can also be found on the Company’s website at www.costain.com
ShareGift
The Orr Mackintosh Foundation (ShareGift – Registered Charity No. 1052686) operates a charity share donation scheme for shareholders
with small parcels of shares whose value makes it uneconomical to sell them. Details of the scheme are available on the ShareGift website
at www.sharegift.org. EQ can provide stock transfer forms on request. Donating shares to charity in this way gives rise neither to a gain
nor a loss for Capital Gains Tax purposes and the service is free of charge.
Website
The Company’s website at www.costain.com provides information about the Group including its strategy and recent news. The
‘Investors’ section is a key source of information for shareholders, containing details of financial results, shareholder meetings and
dividends. Current and past annual reports are also available to view and download.
1
Lines are open Monday to Friday 08.30am to 5.30pm, excluding public holidays in England and Wales.
Financial Calendar and Other Shareholder Information continued
CBP030069
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Contact us
We are committed to engaging in dialogue with all our stakeholders.
For investor relations enquiries, please contact: ir@costain.com
For media enquiries, please contact: mediaenquiries@costain.com
Accreditations
ISO 9001 Quality Management System.
ISO 14001 Environmental Management.
ISO 45001 Occupational Health and Safety.
ISO 27001 Information Security Management.
ISO 22301 Business Continuity Management.
ISO 44001 Collaborative Business Relationships.
ISO 20000-1 IT Service Management.
PAS 2080 Carbon Management in Infrastructure.
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Costain Group PLC
Seventh Floor
70 St Mary Axe
London
EC3A 8BE
costain.com/investors