The Leeds-based firm said it raised the money through a share placing and loan conversion.

It revealed the fundraising as it reported annual operating losses of £1.19m for the year to the end of June, down from last year's £1.22m.

However, the group sounded a note of optimism saying it expects growth in its markets to more than compensate for the economic downturn.

The group, which has supplied systems for the London Congestion Charge network, said turnover grew five per cent to £4.18m.

During the year Coe concentrated on tripling its sales force to focus on the growth markets of Asia and the Far East.

Coe said it won its largest contract in four years during the period – a 1,100 camera system for the Port of Singapore Authority. The contract includes Coe's high-tech control room software, recording system and transmission products.

The group has since been chosen to upgrade equipment on rail lines in Singapore.

Order intake during the year was up 16 per cent on last year but operating costs rose to £3.43m from last year's £2.94m.

Since the year end, Coe has restructured its business to "match costs with anticipated revenue".

As part of this plan Andrew Wallace stepped down as chief executive in July and was replaced by Ian Jefferson, former FD.

The group has since reaped the benefits, recording an operating profit after restructuring costs in the first quarter.

In a statement, chairman Dr Alison Fielding said: "With its new digital products launched and the current growth being experienced in the group's pipeline the board believes that any downturn resulting from recent economic conditions will likely be more than compensated for by the increase in available market and looks forward with confidence."