Industry needs infrastructure minister at Cabinet level, Costain boss says

Costain is one of several firms spearheading a push for the government to create a new role of cabinet minister for infrastructure.

The firm, along with several of its listed peers, wrote to the new government within weeks of its election win last summer to propose the post.

Since then, the firm has continued to keep up the pressure and has been speaking to senior officials about the position.

Chief executive Alex Vaughan said the role was “fundamental” to the government’s plans to deliver on promises to build swathes of new infrastructure.

“They’ve got to join the dots across the government departments,” he said. “New homes need water, energy and roads. We need someone with authority sitting around the cabinet table on this.” He added: “People are supportive and listening so we’ll see.”

Vaughan praised the government’s plan to speed up infrastructure schemes and cut down on legal challenges. “We have got to stop the protracted nature [of these schemes] that holds up things for too long.”

The firm said it was still expecting to start work on driving HS2 tunnels from Old Oak Common to Euston in the first half of next year with tunnelling taking up to two years.

HS2’s new chief executive Mark Wild has ordered a review of the scheme with the former Crossrail boss describing it as a “reset” of the programme which he hopes will “break the cycle of this continuous drip-feed of bad news”. MPs recently said the cost of the railway might be close to £80bn.

Meanwhile, Costain said its pre-tax profit last year was up 18% to £36.5m on revenue down 6% to £1.3bn.

Its forward work position, which includes preferred bidder work, was up £1.5bn to £5.4bn while its net cash balance at the year-end was down 6% to £158.5m. The firm said it was doubling its annual dividend paid to shareholders to 2.4p.

Vaughan said Costain was in its “best place ever” and was reaping the rewards from rising spending in its key energy, water, defence and transportation markets.

He promised a “step change” in its performance from 2027 with analysts expecting turnover to be around £1.5bn and operating profit in the region of £60m. This year’s operating profit was up 16% to £31m.