26 July 2010 – update

Shares in Connaught have collapsed in value following an update from the company. Net debt will be significantly in excess of the previously advised level of £120m at its year end of 31 August 2010 and banking covenants will be breached. On a more positive note, there have been some interesting new management appointments. Although there is a high probability that the shares could now prove to be worthless, they should be far higher than 23p if the near term problems with funding are negotiated. For those with a strong appetite for risk we still rank Connaught as a SPECULATIVE BUY.