Connaught has now placed the bulk of its business into administration, with only the compliance and environmental businesses surviving, with the £527 million social housing business the main casualty.
In an update released to the stock exchange last night, the firm said Connaught Compliance Limited, National Britannia Holdings Limited, Fountains Limited and Connaught Environmental Limited (and their respective subsidiaries) would not be affected by the other parts of the business being placed into administration.
These businesses are expected to trade normally in the immediate future, pending agreement with the banks for funding.
The business which will be entering administration are Connaught plc and its subsidiary, Connaught Partnerships Limited, which comprises its Social Housing Division.
The Connaught board are in the process of appointing partners from KPMG to oversee the process.
This brings the ongoing saga towards a potential close, yet leave several questions over what will happen to contracts in the social housing division.
Senior industry sources suggested that if Connaught can not trade normally, then its contracts would have to be renegotiated with rival firms to ensure work continues.
The situation regarding what happens with its social housing contracts will become clearer as the administrators get to grips with the situation.
The social housing division is by far Connaught’s largest division and represented 80 per cent of the firm’s turnover in the 2009 financial year, which ended 31 August 2009.
Its turnover was split as follows:
|Revenue (£m)||Operating Profit (£m)|