Costain announces 75m pound placing, hitting its shares

27th Feb 2014 08:03

Civil engineer Costain boosted annual underlying operating profit by 12 per cent but unveiled a 75m pound capital raising, hitting its shares.Costain said underlying operating profit in the year to December 31st rose 12% to £27.4m on an increase in revenue to £960m from £934.5m. Reported pre-tax profit dropped to £12.9m from £24.7m. Adjusted profit before tax lifted a tenth to £31m.The group, which has contracts in roads, rail, power, airports, water, oil & gas, nuclear processing and waste, said its forward order book rose a quarter to £3bn.It also recommended an increase in its final dividend for the seventh year in a row, taking the total for the year to 11.5p, a 7% increase on a year ago.But the group said it was launching a firm placing and placing and open offer to raise about £75m before expenses to speed up its medium to long-term development.It plans to use the cash to finance the costs of bidding for a number of big projects as well as making bolt-on acquisitions, among other things.Chairman David Allvey said: "The proposed capital raising announced today alongside these good results provides us with the opportunity to accelerate our medium and long-term growth in rapidly evolving markets in which it is expected that over £400bn will be spent in the next 10 years."Shares in Costain fell 33.75p or 10.6% to 285.75p in early trading in London.PW