Shares in engineering firm Costain plummeted 34 per cent today as it revealed plans to launch a £100m fund raise to bolster its balance sheet.
Costain’s stock slumped to 104.8p after the announcement, which came off the back of a £6.6m loss before tax in 2019 – compared to a £40.2m profit in 2018.
The company blamed a hit from key projects being cancelled and delayed.
Costain’s dividend per share also plunged from 15.15p in 2018 to 3.8p last year, the firm said today. Revenue also fell 21 per cent from £1.46bn to £1.15bn.
Net cash fell 45 per cent from £118.8m to £64.9m.
“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,” boss Alex Vaughn said.
“However, we are pleased that the group has continued to secure significant new work during the year,” he added.
The Head of the Valleys A465 project in South Wales is expected to be two years late and £20m over budget. Costain faced an arbitration ruling that responsibility for the overrun between the firm and the Welsh government.
Costain has, however, won contracts including work on the southern section of HS2 and various sections of highway around the country.
The company issued profit warnings at its two trading updates last year.
Chancellor Rishi Sunak made infrastructure a key facet of his Budget today with £600bn announced to improve road and rail connections throughout the country.
This growing market is something Costain hopes to take advantage of going forward.