Shares in Costain were up on the FTSE All Share in morning trading after the construction group reported a rise in pre-tax profit in the full year ended 31 December 2010.
Revenue declined slightly from £1.1 billion the previous year to just over one billion pounds. Despite this pre-tax profit increased from £18.1 million to £27.9 million.
Net cash at the end of the year was reported as rising from £120.5 million to £144.3 million, while the value of the company's order book fell from £2.6 billion to £2.4 billion. Costain said that its pension deficit had been reduced from £75.4 million to £28.9 million.
The group added that it would be raising its full year dividend from 8.25 pence per share to 9.25 pence per share.
David Allvey, Chairman of Costain, said, "We have delivered another excellent performance. Once again, the Group has demonstrated its resilience in a continuing difficult economic environment. We are confident that our position in markets underpinned by strategic capital expenditure, regulatory commitment or essential maintenance requirements will continue to stand us in good stead.
"Through our "Choosing Costain" strategy, we are making good progress in achieving our vision of building Costain into one of the UK"s top solutions providers, with the scale and resources to successfully meet the increasingly complex and challenging needs of major customers.
"To expedite the delivery of our strategy, we said that we would look at appropriate acquisition opportunities, an example of which is Mouchel Group plc, as well as organic growth. We are actively progressing a number of opportunities ranging from bolt-on to transformational transactions, and all of which must meet a strict set of criteria in the event that they were to be concluded.
"We look to the future with confidence, reinforced by our robust year-end order book, enhanced cash balance and the ongoing support of our customers committed to long-term capital investment programmes. That confidence is reflected in the Board"s recommendation to increase the total dividend for the year."
By 11:20 shares in Costain were up three per cent on the FTSE All Share to 265.75 pence per share.