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The chief executive of social housing contractor Connaught has said the group plans to branch out into new markets.

Speaking after the firm announced strong results in the six months to 29 February 2008, Mark Davies (pictured) said it had looked at moving into defence and university accommodation.

He said: 鈥淢ilitary accommodation would be a natural fit. Student halls are another area we are looking at, although it鈥檚 a smaller market."

He also did not rule out a move into education. 鈥淚f a local authority asked us to tender for school maintenance contracts we鈥檇 look at it.鈥�

In the half-year Connaught increased pre-tax profit by 60% from 拢8.1m to 拢13m, driven by 鈥渟trong organic growth and earnings enhancing acquisitions鈥�.

Last year it bought two social housing asset management firms, AE Williams for 拢6.5m and Baldwins for 拢8.7m.

Turnover grew 55% from 拢165m to 拢256m. Davies said the group had not noticed the credit crunch. 鈥淲e are fortunate in that we鈥檙e in maintenance, which will still be an important part of the government鈥檚 housing agenda.鈥�

He denied that the company had received approaches from private equity groups, despite recent activity in the sector. 鈥淭here鈥檚 been a lot of interest but we鈥檙e unlikely to be a target because our price/earnings ratio is too high.鈥�

The ratio is used to measure a company鈥檚 value; Connaught鈥檚 is 16. One observer said: 鈥淭hat would need to come down to single digits. Connaught is a darling in the City and would want a 30% premium on top.鈥�