Construction and engineering company Costain has announced that it is to raise £60 million in a rights issue, while stressing that it expects to see a "significant recovery" in 2007.
In a statement today the firm reported first-half pre-tax profits of £8 million, compared to a loss of £20.7 million for the corresponding period in the previous year.
However the company's revenues dropped back to £430 million in the six months to June 30th, down from £436 million for the first-half of 2006.
Costain also acknowledged that its order book was slightly lower, standing at £1.6 billion at the end of the first-half compared to £1.9 billion a year earlier.
The firm stressed that the fall was a result of its "deliberate focus on quality rather than quantity".
Company bosses said they believed Costain was seeing "significant benefits" from the implementation of its ongoing 'Being Number One' strategy. Costain says that is focus under the strategy is to deploy resources only in those areas where it believes it can either maintain or build upon its existing market position.
Costain said that the proceeds of the rights issue it has announced would strengthen its balance sheet and allow the company to "capitalise" on the opportunities available to it within its chosen markets.
"A platform for the next phase of growth has been established and, following the rights issue with a much strengthened balance sheet and additional financial resources, the directors believe that the group will be well placed to capitalise on the opportunities available in its chosen market sectors," said Costain chairman David Jefferies.
He added that Costain's board expected to see a "significant recovery" in the company's performance over the year in light of its first-half results.
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