Andrew Wyllie, chief executive, looks for ‘strategic partnership’ after £3.3m loss in building arm
The contractor last Friday reported a swing back to profit in its interim results, despite continuing losses in its building division. Andrew Wyllie, Costain’s chief executive (pictured), said the company was now seeking a “strategic partnership” with a secondary infrastructure fund to help finance PFI deals. He also announced that Costain would issue more shares to strengthen its balance sheet.
Tony Bickerstaff, group finance director, said: “We looked at the possibility of selling our equity portfolio, but didn’t want to do that. We are seeking a partnership that will give us funding for both equity and new PFI schemes.”
Costain reported a pre-tax profit of £8m for the six months to June 2007, compared with a loss of £20.7m in the same period last year. Turnover fell slightly to £430m from £436.2m.
We looked at the possibility of selling our equity but didn’t want to do that
Tony Bickerstaff, Costain
Its results were strengthened by a good performance in its civil engineering division. This recorded an operating profit of £9.9m. Its building arm, which contributed to a £61.7m loss in its full year accounts in 2006, improved but still recorded an operating loss of £3.3m.
The company, which confirmed it was planning a rights issue to raise £60m, has recently reorganised its business into nine sectors and closed its international division.
Costain continued to suspend dividend payments, but said it expected to be able to issue a dividend of 0.5p with its full year results if the rights issue was successful.
For more on Costain go to www.building.co.uk/archive