Mears share price recovers after dropping 11%

Social housing maintenance firm Mears has seen its share price recover this morning after dropping 11% on Friday.

The fall followed a profit warning by social housing specialist Connaught whose share price plunged by a third following a profit warning related to coalition government cuts.

In a statement this morning Mears said it continues to deliver strong trading across all divisions and that there is no evidence or experience of downward pressure in spending in social housing which remains a largely secure and non-discretionary spend. The firm reports a £2.5bn order book and £3bn bid pipeline

Connaught’s share price has fallen further and is now down 58% doen on Friday morning with shares valued at 138p.

In a statement to the City on Friday, Connaught said profit would be hit by £13m and turnover would be £80m lower as a result of 31 contracts on which spending will be deferred.

It added: “If this were to continue we anticipate a reduction of revenue by £120m and EBITA by £16m for financial year 2011.”

Despite the fall, the company has insisted that the medium-term outlook remains strong and pointed to savings of £25m in 2012 as a result of its cost reduction programme.