Update on Trading
TIDMCNT
RNS Number : 2866O
Connaught PLC
25 June 2010
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Update on trading
Connaught has carried out a detailed analysis of its business in the lead up to
and following the Emergency Budget. The company has identified 31 contracts
within its Social Housing division where a proportion of the value relating to
capital expenditure has been deferred. This will impact revenue by around
GBP80m and EBITA by GBP13m in the current financial year. If this were to
continue we anticipate a reduction of revenue by GBP120m and EBITA by GBP16m for
financial year 2011. As a result we expect a one-off impact to our cash
conversion rate, reducing to around 40% this financial year.
The medium-term outlook for the business remains strong. As previously
indicated the company is undertaking a cost reduction programme. This is
expected to yield savings of at least GBP25m for financial year 2012. We have a
record bid pipeline of GBP5.3bn reflecting the trend towards larger, longer-term
contracts as our customers seek to address their budgetary restrictions.
Connaught is ideally placed to meet the emerging requirements of this market