Connaught slides after Budget warning

Shares in Connaught slumped after the social housing firm lowered its estimates for this year and next year because of the emergency budget.The group said it has identified 31 contracts within its social housing division where a proportion of the value relating to capital expenditure has been deferred. Shares in the company fell by nearly 30% after the announcement, which came not long before trading closed. Connaught's revenues for this year will be around £80m lower and underlying profit will be down £13m, it said today. If the trend continues, Connaught expects revenues to reduce £120m for financial year 2011 and underlying profits down £16m."As a result we expect a one-off impact to our cash conversion rate, reducing to around 40% this financial year," Connaught said.The group added that the medium-term outlook for the business remains strong.Broker KBC Peel Hunt said it anticipates moving its 2010 pre-tax profits estimate from £55 to £40m following the shock announcement. Fellow social housing group Mears fell in sympathy with Connaught, losing about 8% of their value. That prompted Mears to issue a statement saying it has not experienced the same problems as Connaught. The statement was released after the close of trading.'Mears notes the announcement made by Connaught regarding the delays in contracts within social housing and reflective share price movements,' the company said. 'Mears is pleased to announce that they have not experienced such delays as a result of the emergency Budget, and current trading remains in line with management expectations.' Mears