Corporate Services Group – owner of the Blue Arrow high street recruitment brand - has announced a series of drastic measures to bring it back to financial health.

CSG, reporting its annual results for 2003, announced “a fundamental refinancing of our balance sheet”, which will involve restructuring £60m of the group’s shares and re-arranging the company’s banking facilities in the UK and the US. CSG also plans to raise around £14m through an open share issue.

The company began slimming down its management structure in the second half of last year, and has seen little benefit so far but expects to see a positive effect on costs in 2004.

However, tough cost controls helped CSG to reduce its operating losses to £12.1m from a total of £16.7m in 2002.

For the year to 31 December, sales dropped 11.4% to £524.3m, not helped by a revenue drop of 10.2% in the Blue Arrow division after the loss of a few major contracts. Revenue in CSG’s UK healthcare division also declined, by 2%.

In terms of outlook, CSG said it had won a number of substantial contracts towards the end of 2003 that would feed through into the group’s revenues in 2004.

CSG executive chairman Julian Treger said he hoped the restructuring measures would lead to a £10m annualised cost reduction by the start of 2005.