Costain posts interim profit of £8m but construction arm records operating loss of £3.3m
Costain has reported a swing back to profit in its interim results, despite continuing losses in its buildings division.
The contractor reported a pre-tax profit of £8m for the six months ended June 2007, compared with a loss of £20.7m in the corresponding period last year. Turnover fell slightly to £430m from £436.2m.
The company’s results were strengthened by a good performance by its civil engineering division, which recorded an operating profit of £9.9m. Its building division, problems in which contributed to a £61.7m loss in Costain’s full year accounts for 2006, improved its performance but still recorded an operating loss of £3.3m.
The company, which confirmed a rights issue intended to raise £60m in a bid to strengthen its balance sheet, said that it had now refocused the business following recent poor performance. Chief executive Andrew Wyllie has been structuring the business around fewer, key sectors in a bid to strengthen performance, and has also closed the company’s international division.
David Jefferies, chairman, said: “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.”
The company continued to suspend dividend payments, but said that it expected to be able to issue a dividend of 0.5p alongside its full year results if the rights issue is successful.