Costain announces that it has secured its £1bn Long-Term Programme with Sellafield, shares 140p, TP 200p

 Mark Watson-Mitchell - 13.10.2025

Costain Group (LON:COST) has today announced that it has been selected by Sellafield Ltd as its Utilities Delivery Partner, a major part of Sellafield's Infrastructure Delivery Partnership.

As Utilities Delivery Partner, Costain will refurbish and replace a variety of on-site and off-site utility distribution systems and services to enable Sellafield's decommissioning programme.

The contract is expected to be worth up to £1bn to Costain and consists of an initial term of nine years with an option to extend by a further six years, either in a single extension or multiple smaller extensions.

The total value of Sellafield's IDP is worth up to £2.9bn.

Management Comment

CEO Alex Vaughan stated that:

"This new contract award with Sellafield, with whom we have been working with since 2005, is testament to our strategy of developing long-term relationships with tier 1 customers, building strong and collaborative partnerships, broadening our service offering, and maintaining consistency and continuity of workflows.

This long-term award follows previous contract wins in the civil nuclear energy market this year with Sizewell C and Urenco and further demonstrates our integral position in this market.

The Government is clear that the safe and responsible decommissioning of the UK's nuclear legacy is a critical part of creating a sustainable future and delivering local and national economic prosperity.

As one of Sellafield's trusted partners we will deliver safe, high-quality utilities upgrades in a complex working environment."

My View

After having touched 172.40p during the recently completed Share Buy-Back, the groups shares dipped to 124p, before part-rallying to 140.60p now.

I see them gradually gathering more steam to break above that previous High.

They are trading on just 9.8 times current year and only 8.9 times prospective earnings, while the £377.5m capitalised group boasts some £172m cash in its balance sheet - these shares are going HIGHER!

(Profile 05.09.19 @ 155p set a Target Price of 250p)

(Profile 02.08.21 @ 55p set a Target Price of 69p*)

(Profile 24.08.23 @ 50p set a Target Price of 62p*)

(Profile 20.08.25 @ 139p set a target Price of 175p)

Asterisks * denote that Target Prices have been achieved since Profile publication.