Contractor鈥檚 stock continues to fall after yesterday鈥檚 losses and rights issue announcements
Shares in Costain fell below 拢1 today, a record low for the contractor, after its stock plummeted 34% yesterday in the wake of news that it went into the red last year.
The latest share dive, down 17% to 88p at 2pm today, values the loss-making firm at just 拢96m.
Five years ago Costain鈥檚 shares were nearly 拢5 a share and even as recently as last summer were worth more than 拢3.
Yesterday Costain announced a 拢100m rights issue 鈥渋n the coming weeks鈥� to bolster its balance sheet and reported a near-拢7m pre-tax loss for 2019, on 拢1.2bn of turnover, versus a profit of 拢40m in 2018.
The group blamed the downturn on delays to the start of jobs and a contract cancellation, believed to be the M4 widening scheme which was pulled by the Welsh government in May last year and which cost the firm 拢500m-worth of work.
The 拢100m rights issue was prompted in part by the fall-out from the introduction of the prompt payment code, which led to higher working capital requirements, and the increased the use of joint operation structures and project bank accounts which tied up more of the firm鈥檚 resources.
The firm had 拢64.9m in the bank at the year-end and average month-end net cash of 拢41.2m in 2019, down from 拢77.1m a year earlier.
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