Connaught plc

Connaught plc

Type	Public (LSE: CNT)
Industry	Outsourcing
Founded	1982
Headquarters	Exeter, UK
Key people	Ian Carlisle, Chief Executive Sir Roy Gardner, Non-Executive Chairman Stephen Hill, Finance Director
Revenue	£659.6 million (2009)[1]
Operating income	£32.6 million(2009)[1]
Net income	£17.5 million (2009)[1]
Website	www.connaught.plc.uk

Connaught plc (LSE: CNT) is a company in the United Kingdom, operating in the social housing, public sector and compliance markets. It is headquartered in Exeter and was a constituent of the FTSE 250 Index before going into administration in September 2010.

Operations

The Group is organised into three divisions:

• Connaught Partnerships - working with social housing landlords throughout the United Kingdom to provide a range of planned and response maintenance services, as well as compliance and estate management
• Connaught Compliance - one of the UK's leading providers of safety, health and risk management solutions. The business has information, advisory, training and servicing capabilities to provide a fully integrated compliance solution throughout the UK
• Connaught Environmental - offers a complete environmental service on a national basis that includes consultancy, project management and full delivery, specialising in grounds maintenance, tree and vegetation management, estate cleaning, street scene and waste management

History

The business was founded in 1982 as a concrete repair specialist based in Sidmouth, Devon and in 1986 won its first major social housing concrete repair contract.^[2][3] During the early 1990s Connaught expanded its services to include external wall insulation and overcladding and latterly began refurbishing all external elements of social housing including roofs, windows and doors. The business also expanded geographically, opening offices in London in 1990, Leeds in 1995 and Bromsgrove in 1997. The 1990s saw significant corporate changes at Connaught plc, first in 1996 when Mark Tincknell led a management buyout and again in 1998 when the business was floated on the Alternative Investment Market.^[4][3] Connaught pioneered the first customer satisfaction measurement system in the construction industry, produce the first ever guide on Tenant Liaison supported by TPAS and employ the industry's first Tenant Liaison Officer.^[3] In 1999 Connaught was awarded its first social housing "Partnering" contract with Gosport Borough Council.^[3]

In 2001, Connaught won its first responsive repairs contract and in 2002 won its first ALMO contract. By 2004 the business had acquired social housing service providers in Scotland and Wales and had revenues in the region of £300 million and negligible net debt. In 2005 Mark Tincknell stepped down as CEO and was replaced by Mark Davies. In 2006 he was followed by Stephen Hill, formerly from Serco as Finance Director. Connaught was fully listed on the London Stock Exchange in 2006 and by 2007 the company rose to the FTSE 250.^[3]

Having acquired Gasforce in 2002 and 7 other related businesses between 2005-2007 Connaught became the UK's leading provider of integrated compliance services with the 2007 acquisition of National Britannia for £91m.^[5][6] During 2009 Connaught acquired the listed environmental services company Fountains plc for £13m.^{[7] [8]}

Collapse of Connaught PLC

In 2010, Connaught plc was shaken by a series of events triggered by the abrupt departure of its Chairman, Mark Davies. Mark Tincknell stepped in as interim Chairman and insisted Connaught's future was rosy and contained no surprises. Connaught's statement to shareholders in April was remarkably bullish. It was, therefore, all the more shocking when Connaught issued a profits' warning during the last few minutes of the week on June 26th 2010. The company tried to explain that the emergency budget of the new government had damaged the company's future profits. Other companies operating in the sector immediately distanced themselves from that statement. The event knocked a third off the company's value. An attempt by Connaught to explain itself to the London Stock Exchange the following Tuesday failed, leaving analysts confused and uneasy, and knocked a further third off the company value. Sir Roy Gardner, the group's new Chairman, stepped forward to assure the stakeholders that he would instigate an appraisal of the company accounts to resolve widespread concerns about the group's atypical accounting practices. Those practices were considered unusual but not illegal. Shortly after this, Mark Tincknell and Stephen Hill, the Finance Director, resigned from the senior management team^[9]

On 8 September 2010, Connaught Partnerships was put into administration, having failed to secure funding to pay £220million of debt, and trading in the company's shares was suspended.^[10] Analysts said "There is mounting anecdotal evidence that [Connaught] were just bidding too low for contracts in order to get them. In the construction trade they rather unpleasantly call it 'suicide bidding', where you bid so low that it actually potentially jeopardises your company. It has emerged that systems and processes had not kept track with the vast growth the business reported in the previous 5 years and that acquisitions had not been properly integrated."^[11]

Connaught Compliance and Connaught Environmental continued to trade as usual.

References

1. ^ ^{a b c} "Connaught plc Annual Report & Accounts 2009". Connaught. 2009. http://www.connaught.plc.uk/userfiles/file/Annual%20Report%202009.pdf. Retrieved 11 September 2010. 
2. ^ "Connaught aims to triple turnover". Contract Journal. 8 August 1996. http://www.contractjournal.com/Articles/1996/08/08/25318/connaught-aims-for-triple-turnover.html. 
3. ^ ^{a b c d e} "Connaught: History". Connaught. http://www.connaught.plc.uk/group/aboutconnaught/history. Retrieved 11 September 2010. 
4. ^ King, Dave (1999). "This little company went to market". Building. http://www.building.co.uk/story.asp?storycode=8071. Retrieved 11 September 2010. 
5. ^ "City Briefing". The Guardian (London). 27 July 2002. http://www.guardian.co.uk/business/2002/jul/27/1. Retrieved 11 September 2010. 
6. ^ "Connaught delivers record profit growth". 24dash.com. 22 April 2008. http://www.24dash.com/news/Housing/2008-04-22-Connaught-delivers-record-profit-growth. Retrieved 11 September 2010. 
7. ^ "Connaught on track and ready to acquire". CNPlus. 15 July 2009. http://www.cnplus.co.uk/news/business/connaught-on-track-and-ready-to-acquire/5205154.article. Retrieved 11 September 2010. 
8. ^ "UNITE forms partnership with Connaught". SED. http://www.contractjournal.com/Articles/2009/03/10/65581/unite-forms-partnership-with-connaught.html. Retrieved 2009-06-02. 
9. ^ Blackhurst, Chris (16 July 2010). "Reading between the lines". Inside Housing. http://www.insidehousing.co.uk/analysis/opinion/reading-between-the-lines/6510755.article. Retrieved 11 September 2010. 
10. ^ "Connaught administration threatens thousands of jobs". BBC News. 8 September 2010. http://www.bbc.co.uk/news/business-11224398. Retrieved 11 September 2010. 
11. ^ Knight, Laurence (8 September 2010). "Connaught collapse: What went wrong?". BBC News. http://www.bbc.co.uk/news/business-11228059. Retrieved 11 September 2010. 

External links

• Official site