Connect Group has warned its performance since May has been “slightly below” market expectations, as it revealed that its plan to slash group debt through the sale and leaseback of property had hit the buffers.

In a trading update today (13 August), the group said that “due to the current market conditions and outlook” bids received during the tender process for the 16 freehold and long leasehold Tuffnells properties, which were expected to raise £35m before tax,  “did not meet the board's expectations in respect of value, economic return and timings”.

This made it “unlikely” the group would conclude a deal for the property before the end of the current financial year.

The failure to make a sale is a blow to Connect Group's attempt to cut its more than £75m of debt as it works to turnaround Tuffnells' fortunes.

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In the statement, which covers the trading period since its half-year results on 1 May, the group said its other business, Smith’s News, had delivered a “strong performance” that had partially offset “a slower turnaround performance at Tuffnells”.

Connect Group has previously said it was targeting a second-half return to profitability for Tuffnells.

The company will publish its preliminary full-year financial results on 6 November 2019.