Connaught shares take a dive

The repair and maintenance specialist, which has a number of contracts dealing with social housing across Yorkshire, has been in turmoil since its June warning that Government spending cuts could blow a 200m hole in revenues over this year and next.

Chairman Sir Roy Gardner said earnings before interest and tax would plunge heavily into the red this year but Exeter-based Connaught is also making provisions for further losses on contracts and taking "significant write-downs".

The stock fell as low as 10p, valuing the company at 14m and marking the lowest level since it floated in 1998 but later recovered to close at 15.5p, a fall of 13.5p.

The shares have now lost 95 per cent of their value since the crisis emerged days after Chancellor George Osborne's emergency Budget.

Sir Roy has drafted in four new directors to help to salvage the business and last week secured breathing space from lenders with a 15m short-term loan.

Connaught recently identified 31 projects where spending will be delayed as a result of the spending clampdown, wiping 80m off revenues.