Connaught, the AIM-listed social housing expert, this week warned that it was writing off £7.75m for the 2004 financial year.
The cost is mainly associated with the 950 redundancies made by Connaught as it withdraws from the corporate sector. The firm has exited its fit-out, corporate cleaning, FM and air-conditioning supply businesses.
A stock exchange announcement on Tuesday said the loss was higher than it had expected when its interim results were announced in May.
Mark Tincknell, chief executive, said the firm would focus on its two profitable divisions: social housing and health and safety compliance for small and medium-sized enterprises, which includes gas maintenance.
“Prospects were so high in these areas that we decided to take the hit and refocus,” he said.
Tincknell added that the social housing arm, which accounts for more than two-thirds of profit, was booming. It intends to develop that part of the business organically.
Tincknell said the SME division, which he hoped would grow to account for half of the company’s profits, would expand by acquisition.
The firm’s share price fell just 2% to 473.5p after the announcement.
Connaught also announced the appointment of two directors on Tuesday. Garry Peagam has joined as finance director, replacing David Pike who has been made corporate development director, and Mark Davies has joined as chief operating officer.