Budget cuts see Connaught order book grow

The group, which counts a number of Yorkshire's local authorities as its clients, said the current environment of cost cutting is creating "significant opportunities".

"Financial pressure in the public and private sectors is driving deep, structural change as customers seek to reduce cost while enhancing service levels," said the company.

Connaught is working on schemes across the region including revamping council housing in Hull and North Yorkshire, as well as a 28m contract to repair and maintain 12,000 Yorkshire homes, won last year from housing association Yorkshire Housing.

The group said order intake was strong in the six months to the end of February, helping its order book grow to 2.9bn from 2.7bn a year earlier. Its pipeline has grown more than 30 per cent over the year to 4.9m.

Connaught posted an 18 per cent rise in adjusted pre tax profits to 23.8m, with revenue up 17 per cent to 355m. The group also raised its dividend 20 per cent to 1.308p per share.

Its biggest arm, social housing, grew operating profits 17 per cent. The environmental business saw profits surge 60 per cent, and its compliance arm grew profits 13 per cent.

"We remain attracted to the structural growth opportunities in both of Connaught's key markets and believe that given the longer term opportunities, the current price is factoring in too much downside risk," said analysts at stockbrokers Brewin Dolphin.