Costain Group Plc (LON:COST) shares fell 30% in Wednesday morning’s deals as financials for 2019 slumped and the firm revealed a plan to launch a £100mln fund raise.
Revenue for the twelve months ended 31 December 2019 was reported at £1.15bn, down from £1.46bn in 2018. It made an operating loss of £3.2mln, from a £43.1mln, underlying profit reduced to £14.6mln from £49.7mln.
The company reported a pre-tax loss of £6.6mln, after a £40.2mln profit last year.
Costain’s dividend was clipped to 3.8p per share, from 15.15p, and the company ended December with £64.9mln.
Chief executive Alex Vaughan described it as a “year of transition” as it works to reshape and refocus the business.
“Our underlying financial performance was impacted by delays to certain contract start dates and new awards, together with a contract cancellation and the loss resulting from the A465 arbitration,” Vaughan said in a statement.
“However, we are pleased that the group has continued to secure significant new work during the year.”
Costain said it intends to launch a £100mln in the coming weeks, with the equity sale underwritten by HSBC, Investec and Liberum.
At the same time, and conditional on completion of the raise, the company has also agreed to extend its existing banking facilities to September 2023 from June 2022.
Giving rationale to the funding the firm said its markets have changed significantly over the last five years and the company’s repositioning has “structurally increased working capital requirements.”
Costain shares fell 45p or 29% changing hands at 112p.