Shares round-up: big reactions to Costain and Ithaca Energy results
Latest figures and updates from these popular companies had the shares heading in very different directions. Graeme Evans has the details.
20th August 2025 15:32
A fast-tracked dividend plan by high-yielding Ithaca Energy Ordinary Share (LSE:ITH) today ensured the shares of the North Sea operator maintained their strong run at the top of the FTSE All-Share.
Boosted by an upgrade to its production guidance for the year, Ithaca said that it was in a position to accelerate the timing of payments under its $500 million (£371 million) dividend plan for 2025.
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Ithaca’s results-day advance contrasted with another of this year’s top-performing stocks, with Costain Group (LSE:COST) bottom of the FTSE All-Share despite a significant increase in its interim dividend alongside confidence in medium-term expectations.
The infrastructure projects business fell 25p to 138.4p, leaving shares 46% higher this year and back where they were in mid-June.
The retreat came as half-year revenues fell 18% to £525.4 million, reflecting previously flagged road contract completions and the rephasing of higher-margin HS2 volumes into later years.
The downturn in transportation was offset by a stronger-than-expected performance in the natural resources unit, which spans projects in water, energy and defence and nuclear energy.
Group-wide adjusted operating profit rose 3.1% to £16.8 million, boosted by a much-improved margin of 3.2% compared with 2.5% a year earlier.
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Chief executive Alex Vaughan reiterated confidence that Costain will meet its margin run-rate target of 4.5% during the year, extending the progress made on this front since 2021.
He reported a forward work position of £5.6 billion - more than four times 2024 revenue - and said the company has already secured 90% of forecast revenue for this year.
The outlook has benefited from commitments made by the government in its recent 10-year infrastructure strategy, together with the significant increase in committed regulatory investment in the key sectors of water, energy and aviation.
While mindful of potential phasing decisions in government spending, the group said it remained confident in delivering on expectations for further progress in 2025 and 2026 before a “step change” in performance in 2027 and beyond.
Vaughan said: “Our strong net cash position, progression in our dividend and share buyback programme are creating substantial value for shareholders.”
The group intends to pay a dividend of 1p a share on 17 October, representing a jump from 0.4p the year before. A £10 million share buyback announced on 16 June has been completed.
Panmure Liberum lifted its price from 170p to 190p following the results, noting that the company’s valuation metrics were “simply too cheap” given £173 million of expected cash on the balance sheet.
Peel Hunt also raised its price target from 150p to 180p, reflecting confidence in underlying margin evolution and capital allocation options.
The positive reception to Ithaca results came as the company reported more strong progress since its transformative tie-up with Eni UK last year.
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The group, which has stakes in six of the 10 largest fields in the UK Continental Shelf, said production and underlying earnings more than doubled in the first half of the year
Assuming an oil price of $70 a barrel and gas at 85p a therm, Peel Hunt said its forecast of $1 billion of cash flow in 2025 should comfortably cover the $500 million dividend planned for this year and also help control net debt.
The shares yield income of 10%, having distributed $900 million through dividends in respect of the 2023 and 2024 performance. The company now boasts a market value of £3.3 billion after shares returned to near where they were at the November 2022 IPO.
A first interim dividend of 10.1 US cents worth $167 million is due to be paid next month, followed by an earlier-than-expected December distribution of $133 million due to the strong year-to-date performance and cash generation.
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