Connaught clients seek alternatives
Worried housing associations are approaching rivals of Connaught ahead of an expected announcement that it has gone into administration.
The social housing contractor has today issued a statement to the stock market saying it ‘believes that the availability of additional funds from its lenders will not be forthcoming’ and suspending the trading of its shares.
It has said it will make another announcement shortly, prompting speculation the contractor is to go into administration.
John Morgan, chief executive of rival contractor Morgan Sindall, said around a dozen clients of Connaught have already approached his firm about whether it can step in to cover contracts.
He said: ‘Clients have been approaching us over the last few weeks, but there has been a sharp increase in the number of approaches today.’ Mr Morgan added that Morgan Sindall is in a position to take on the extra work.
Bob Holt, chairman of another rival, Mears Group, said: ‘We are watching the situation carefully and we are ready and willing to pick up work if it becomes available, we have been approached.’
Inside Housing reported last month that associations have been making emergency plans in case Connaught, which has for weeks been involved in emergency talks with creditors, should collapse.
A2 Dominion, which owns or manages 33,000 homes across London and the south, holds a 12-year service contract worth £117 million with Connaught. Its executive director Andrew Evans said last month that ‘detailed contingency plans’ had been made, but would not specify further what these involved.
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Readers' comments (3)
Melvin Bone | 07/09/2010 3:29 pm
I hope all the social landlords have not spent all the money they 'saved' from opting for the cheap Connaught contracts...
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Anonymous | 08/09/2010 9:27 am
Here is the collapse of another private company who have been providing service to the public sector. Is anybody monitoring these failures and the impact it has on financial and social costs?
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Anonymous | 08/09/2010 11:31 am
A bit late in the day for HAs to be "worried" isn't it?
If they had been doing their job properly and carrying out routine due diligence on their supplier they would have picked up the same information as analysts in the City - aggressive at recognising profit, slow to accept cost.
Shouldn't all the notoriously precarious financings of construction companies in the sector now come under scrutiny.
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