Age of austerity makes Connaught desperate for more cash

Shares in the company fell 80.9 per cent, to 19.5p, as the support services group, listed on the FTSE 250 index of mid-sized companies, said it had identified an "urgent requirement for additional funds" following a review of its finances and it was in talks with its lenders.

"This is clearly a disturbing statement which leaves us uncertain about trading and the financial position ... we are still in the dark and retain our 'sell' rating," Joe Brent, analyst at Liberum Capital, wrote in a note.

Analysts at Altium Securities said they would withdraw forecasts, recommendation and price target for Connaught's shares until they had more clarification from the company on the state of its finances.

Connaught provides maintenance services for the social housing sector, an area vulnerable to Downing Street's swingeing public sector cuts.

Last month, local governments deferred some of their contracts with the company.

Since June 25, Connaught's shares have plunged more than 90 per cent, slicing more than 400m off its market value.

Connaught also said that it was planning a number of changes to its management team, including hiring Stephen Billingham, the former finance director of engineering firm Atkins.