The move will strengthen Costain’s balance sheet and improve its average month-end net cash, which fell to £41m last year from £77m in 2018.

Today Costain also announced it suffered a £6.6m pre-tax loss last year down from a £40m profit in 2018.

The contractor said it had been hit by contract delays and cancellations, which dented expected profitability by £16m.

Costain’s profit was reduced by a further £20m as a result of an arbitration ruling on its Heads of the Valleys A465 road project in Wales.

This scheme is now expected to come in more than £100m over budget and more than two years late.

Revenue fell by 21% to £1.16bn as Costain pursued its Leading Edge strategy to target higher-margin complex work and services contracts.

In the medium term, chief executive officer Alex Vaughan, believes the group can deliver a blended divisional margin of 6-7%.

He said: “Our underlying financial performance was impacted by delays to certain contract start dates and new awards, together with a contract cancellation and the loss resulting from the A465 arbitration.

“Our Leading Edge strategy aligns our activities to meet our clients’ changing needs, supporting a step change in our programme delivery performance and an acceleration in the deployment of our higher margin activities. 

“The UK infrastructure markets are growing and developing rapidly, with increasing demand for innovative solutions to upgrade, enhance and decarbonise the nation’s strategic infrastructure.

“This is a significant opportunity for our business and we are well placed, with our breadth of integrated services, to benefit from these market dynamics.

“Strengthening our balance sheet will enable us to capitalise on these opportunities and further enhance our capabilities.”

Vaughan added that fresh measures to ensure suppliers are paid promptly had taken the average payment time to 34 days from 58 days in the same period in 2018, reducing cash held by £15m.

He added that the cash-raising was also needed to respond to pressure on working capital from cash held in joint operations and project bank accounts.