Colas Rail prioritises cash as operating margins improve

Colas Rail has delivered an improved operating margin and healthy equity, as the group prioritises cash generation and careful contract selection.

Revenue in the year to 31 December 2025 was £428.6 million, slightly ahead of the previous year, underscored by an operating profit of £28.3 million (FY2024: £24.6 million).

Colas’ construction units account for the majority of group turnover (67 per cent), with freight and maintenance services contributing the remaining income.

The group operating margin at year end was 6.6 per cent (FY2024: 5.7 per cent), reflecting improved contract selection. 

Colas’ balance sheet showed underlying cash totalling £81.3 million, down from £108.9 million in 2024, with improved net assets worth £112.7 million (FY2024: £98.5 million). 

Cash flow remains a key priority for the group, alongside profitability which the company manages by being selective about the work it contracts to undertake.

During the period Colas’ order book grew to £1.43 billion from £1.1 billion, providing a level of secured revenue in the new year. 

While volume is a key metric for growth, Colas also considers the “survivability and profitability” of that revenue when bidding for work on key infrastructure projects. 

This year, Colas Rail signed a five-year contract with Network Rail to operate and maintain its fleet of Mobile Maintenance Trains (MMT) which enable engineers to carry out repairs, renewals and upgrades across thousands of miles of track. 

In March, the Midland Metro Alliance (MMA), for which Colas Rail is the principal contractor, handed over the first phase of the Birmingham Eastside Extension (BEE) to Transport for West Midlands.

Works continue on the second phase of BEE, linking the existing route through the forthcoming HS2 station at Curzon Street to Digbeth.

“We have a secured pipeline of work to 2029 and beyond as result of successful delivery for our customers and strong tender performance,” a financial statement reads. 

The rail infrastructure services provider has issued zero dividends in the last two years. 

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