Senior directors Andy Collins and Graham Read will pay almost £4m for the Connaught flooring and MBG businesses.

Under the terms of the deal, former group Chief executive Graham Read will run the specialist building arm MBG and chief operating officer Andy Collins will become sole director of Connaught.

The remaining Aim-listed Mountfield company is also planning to raise £3.1m through an underwritten share placing to enable the remaining board to search for acquisition opportunities which, if successful, would constitute a reverse takeover under the AIM regulations.

This morning the group warned turnover, operating profits and the levels of secured turnover were at levels not seen since the recession of 2008 and 2009 and operating profits in 2020 were unlikely to be significantly above break-even.

Chairman Peter Jay said: “The board is not confident that Connaught and MBG can return to pre-pandemic levels of activity and profitability in the foreseeable future.

“This is because work patterns have changed substantially and demand for new and refurbished office space is unlikely to return to pre-pandemic levels in the near future and, as a result, demand for Connaught’s services will continue to be depressed.

“Directors concluded that the current level of business and marginal profitability makes it increasingly difficult to support the costs of maintaining the company’s AIM quotation.

“Further, the directors are no longer willing to continue providing personal guarantees for the Group’s bank overdraft facility in these circumstances.”