Wednesday, Connaught Plc (CNT.L), a provider of integrated services, in an interim statement, said it remains confident of delivering full year results in line with management's expectations. Separately, the company announced a recommended share offer of GBP 13.3 million for Fountains Plc (FNT.L).
Grenadier Road, Exeter-based Connaught said its Social Housing business continues to perform well and is trading in line with management's expectations. The company added that Compliance business, which is now fully integrated and single-branded as Connaught is also in line with its expectations.
Connaught noted the strong performance that has continued into the second half ending August 31, 2009, with a high level of new contracts in the Compliance and Social Housing divisions. According to the company, year-to-date order intake exceeds GBP 650 million.
Separately, the company announced a recommended share offer for GBP 13.3 million for the entire issued and to be issued ordinary share capital of Fountains, an environmental services business. Connaught expects the acquisition to deliver enhanced earnings for the company in the financial year ending August 2010, being the first full year following completion of the acquisition.
The company also believes that Fountains will significantly enhance the company's capabilities in the environmental space and expand its service offering and client base in the fragmented environmental services market worth GBP 1.5 billion per annum.
Accordingly, scheme shareholders will receive 0.2377 new Connaught shares for each Fountains share held, for a value of each Fountains share at about 88 pence, based on the closing bid price of a Connaught share on July 14, 2009 and the fully diluted share capital of Fountains at GBP 13.3 million.
Based on the closing bid price, the offer consideration represents a premium of 43.1% to the closing price per Fountains share of 61.5 pence on July 14, the last business day prior to the announcement date and 51.7% to the closing price per Fountains share of 58 pence on November 4, 2008, being the last business day prior to the commencement of the offer period.
The offer consideration also represents a premium of 74% to the average closing price of 50.6 pence per Fountains share for the six-month period prior to the announcement date.
The company noted that in the event of the scheme becoming effective and based on the fully diluted share capital of Fountains, Connaught is expected to issue about 3.6 million New Connaught Shares, representing nearly 2.8% of the enlarged issued share capital of Connaught.
Executive Chairman of Connaught Mark Tincknell said, "Connaught operates in large, fragmented markets, with strong growth potential and has sought to grow its market share organically and by selected acquisition, and today's announcement is a continuation of that successful strategy."
Fountains, in its interim results for the six months ended March 31, announced pre-tax profit before exceptionals of GBP 0.8 million and revenues of GBP 21.2 million. As on March 31, 2009, the company reported gross assets of GBP 20.5 million. For the year ended September 30, 2008, Fountains reported a pre-tax loss before exceptionals of GBP 0.01 million on revenues of GBP 41.8 million.
Further, Fountains' management team, led by Chief Executive, Richard Haddon, and Finance Director, Matthew Turnock, will be retained by Connaught in its enlarged environmental division.
Close Brothers Corporate Finance Ltd. is acting as financial adviser to Connaught and Collins Stewart is acting as financial adviser to Fountains.
Connaught also confirmed that it is in the final stage of negotiations to acquire two complementary, bolt-on, compliance services businesses which it expects to announce in the near future.
Tincknell commented, "The acquisition of Fountains in environmental services and the ongoing expansion of the Group's Compliance services business will significantly enhance our future opportunities. Across our businesses we operate in markets that are large and fragmented, providing strong growth potential, and market opportunities continue to emerge in both Social Housing and Compliance divisions."
For the year ended August 31, 2008, Connaught's profit before taxation was GBP 21.7 million and consolidated turnover was GBP 552.9 million. The company noted that it has an order book in excess of GBP 2.7 billion and this provides high visibility of earnings for the years ending August 31, 2009 and 2010.
Connaught is slated to report preliminary results on October 13, 2009. CNT.L is currently trading at 362.25 pence, down 8.25 pence or 2.23%, on a volume of 81 thousand shares.
FNT.L trades at 80.5 pence, up 19 pence or 30.89%, on 121 thousand shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.