Connaught calls in administrators KPMG
Administrators are being appointed to Connaught’s social housing division after the contractor failed to secure additional funding.
KPMG is being appointed as administrator for Connaught plc and its subsidiary, Connaught Partnerships Limited, which includes the social housing division.
The group’s compliance and environmental divisions are not being placed in administration, and will ‘continue to trade normally’.
Connaught confirmed the move last night, which had been widely anticipated after the company suspended trading of its shares on the stock market earlier in the day.
The company has issued a series of warnings about its financial situation since June, when it said its revenues were down £80 million as a result of councils postponing work following the emergency Budget.
The statement says talks with its lenders and other financial institutions have ‘failed to reach a satisfactory conclusion in the time available’.
It adds: ‘Following extensive discussions with the group’s secured lenders, it is now clear that sufficient support would not be extended to the group as a whole to enable it to continue trading as a going concern.’
Connaught employs around 10,000 people and has large numbers of social housing contracts with councils and housing associations.
Yesterday rival contractors reported they were receiving calls from Connaught clients asking if they could take on extra work if the company folded.
Housing associations have also said they are putting contingency plans in place in case the company was not able to continue.
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Readers' comments (3)
Melvin Bone | 08/09/2010 12:10 pm
What a pickle.
I hope that the other firms taking on Connaughts work are in a position to employ the majority of the Connaught workers.
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mick kilkelly | 08/09/2010 12:43 pm
"Connaught ends Mears and Keirs will end in tears" Lets hope that RSLs realise that spreading your risk is the better option and return to given local contractors a chance.I hope that all the sub contractors that connaught are able to continue trading!
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Anonymous | 08/09/2010 2:29 pm
Connaught's will be the start. The idiots in Govt that meddled in socail Housing et al to introduce the madness of Partnering are reaping what they sow. It took years to develop individual partnerships with small local specialist contractors. No offices, no managers in suits, no claims conscious Q.S's. Best value, and a much much better service. Only Govt can bring in idiots form outside Construction to tell us how better to contract. That's right bring in large concerns, who end up using th every same small contractors, screwing them down in price, reaping profits and wringing th erates to the Client. Not rocket science - Connaught's always paid very late imposing difficulties on Subbies and now as predicted, no last payments... Partnering doesn't work with large concerns....
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