Costain Group PLC (LON:COST) has said its board will take a 30% cut as part for up to three months of a group of measures to preserve cash amid the coronavirus pandemic.
The construction firm said the services it provides to highways, local authorities and water utilities, which account for 50% of its annual revenues, were continuing at “safe levels of operation”, while its consultancy services to the energy, defence and aviation sectors were “seeing little change in demand”.
READ: Costain shares slide on 2019 results and new £100mln equity raise
However, Costain added that its on-site construction activities in London, including work on Crossrail, HS2 and the Thames Tideway, have been paused pending further review at the request of its clients due to social distancing measures in the capitol. The activities represent around 30% of the firm’s revenues.
Despite this, the company said it remained “well placed to benefit from the long-term opportunity to address the UK's changing infrastructure needs” once its operations can fully resume.
Aside from pay cuts among its board, Costain also said it was making reductions to its cost base and deferring capital expenditure and was also looking to defer pay as you earn (PAYE) and value added tax (VAT) payments.
The firm also reiterated its plans not to pay a final dividend for the year ended 31 December 2019, and that it was continuing to progress with a £100mln capital raise announced earlier this month which it said will be completed “in the coming weeks”.
"I am confident that the steps we are taking to manage our business through this uncertainty will ensure we are well placed to respond strongly once our operations can fully resume", said Costain chief executive Alex Vaughan.
Shares in the company jumped 8.3% to 38.8p in early trading on Tuesday.
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