Connaught shares crisis (From Daily Echo)
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Connaught shares crisis
10:40am Tuesday 27th July 2010 in
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- By Gareth Lewis » Business Editor
SHARES in Connaught, the firm involved in repairing thousands of Southampton properties, plunged more than 80 per cent in one morning, wiping more than £100m off the paper value of the company and leaving it in crisis.
Shares worth £3.20 a piece a month ago and £4.48 late last year, were worth little more than 19p each for a time on Monday morning before rallying to finish at 31p, valuing it at just £44m.
Assurances Southampton City Council said it had received “complete assurances” that work on the remaining 370 properties covered by the £12m, three-year Decent Homes contract would be carried out.
The collapse in the value of the company came after it revealed it was in “urgent” need of funds.
The Exeter-based group has been in turmoil since its warning last month that Government spending cuts could blow a £200m hole in revenues over this year and next.
Already Connaught has repaired 1,300 kitchens and a similar number of bathrooms in council properties across the city under the initiative, which still has until the end of the year to run.
The company last year found itself in the midst of an asbestos scandal after the Daily Echo revealed a leaked memo to the head of Decent Homes which revealed tenants at “over 100” properties may have been exposed to the deadly material.
A council health and safety investigation found Connaught had removed kitchen tiles and other asbestos-containing materials without proper training or safety precaution. The council insisted no tenants were put at risk.
Connaught returned to the headlines after a statement yesterday saying a review had identified an “urgent requirement” for additional funds to meet current and ongoing business, in part due to pressure from suppliers and sub-contractors.
And the company will breach banking covenants after warning that net debt will be significantly in excess of the previously advised level of £120m by the end of August.
Despite the dire financial tidings, a spokesman for Southampton City Council said: “We have had complete assurances from Connaught that the contract with the council will not be affected in any way.”
Sir Roy Gardner, who became chairman in May, said: “These are challenging times for Connaught. We are fortunate that we have been able to attract a number of senior and experienced individuals to support the company at this time.”
Comments(5)
Lone Ranger
says...
3:13pm Tue 27 Jul 10
MaximumAdrian wrote:I think that you will find that they are all carrying out essential repairs to Shirley Towers where the two Fire fighters lost their lives.
These are the people who seem to think they can park their vans all over the pavement of Church Street blocking prams and wheelchairs. There were nine vans parked illegally last week.
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I hope the staff parking illegally have seen their share options go through the floor.
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I would guess that they partly parked on the pavement because if they parked on the road nothing wider than a van could get past. Therefore if emergency vehicles had to go up Church Street there would have been a problem.
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Why not understand the issue and cross over or walk on the ample grass strip that is by the side of the pavement.
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I hope that you werent too inconvenienced with your pushchair or whatever as tradesmen try an put back together this grief stricken tower block and community
MaximumAdrian
says...
5:24pm Tue 27 Jul 10
Lone Ranger wrote:They broke the law. They could have parked their vehicles on the grass alongside the containers which house equipment and parts.
MaximumAdrian wrote: These are the people who seem to think they can park their vans all over the pavement of Church Street blocking prams and wheelchairs. There were nine vans parked illegally last week. . I hope the staff parking illegally have seen their share options go through the floor.I think that you will find that they are all carrying out essential repairs to Shirley Towers where the two Fire fighters lost their lives. . I would guess that they partly parked on the pavement because if they parked on the road nothing wider than a van could get past. Therefore if emergency vehicles had to go up Church Street there would have been a problem. . Why not understand the issue and cross over or walk on the ample grass strip that is by the side of the pavement. . I hope that you werent too inconvenienced with your pushchair or whatever as tradesmen try an put back together this grief stricken tower block and community
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Goodness they still didn't leave enough space for a fire engine without it crossing to the cycle path on the other side.
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Let's hope these essential repairs (I thought it was planned maintenance of the houses to the North) are managed and checked by someone with more sense than these van drivers. Unfortunately Connaught have proved poor in the past (see above).
RadicalEmu
says...
7:53pm Tue 27 Jul 10
Condor Man
says...
12:03am Wed 28 Jul 10
RadicalEmu wrote:or lose all your stake if they don't. Had the council given the work to their own blokes to do then perhaps they wouldn't be facing this problem with Connaughts.
Quick!!! Buy shares in Connaught now, just in case they sort themselves out!
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Connaught has assured the city council that work will be carried out on its properties, despite the firm’s current troubles.
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MaximumAdrian says...
12:04pm Tue 27 Jul 10
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I hope the staff parking illegally have seen their share options go through the floor.