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Shares in Exeter-based social housing firm Connaught have slumped almost 70% after it said it had identified an "urgent" need for extra funds.

Connaught said its debt levels were set to be worse than feared and it would breach its banking covenants.

Last month, the company announced that its business was set to be hit by government spending cutbacks announced in the Budget.

Shares in Connaught closed down by 69.2% at 31.5 pence.

Its shares have now lost about 90% of their value since late June, when it announced it had identified 31 contracts that had been deferred following the spending cuts announced in the Budget.

At the time Connaught also said it expected revenues to be £80m lower and profits £13m lower this year.

The firm carries out maintenance and repairs for many social housing projects.