The contractor has warned there will be a wave of redundancies as the building and civil engineering business is slimmed down.

North Midland said its building and civil engineering has suffered an “exceptionally poor first quarter, generating a loss of £482,000 on a revenue of £9.82m.”

Chairman Robert Moyle said: “The division is operating in a very difficult market, beset by very tight margins and the reluctance of clients to settle outstanding accounts within an appropriate timescale.  Hence, cash flow is constrained.

“A thorough review of the business has been undertaken and large building projects with an unacceptable level of risk will not be pursued in the future.

“A further reorganization of the division to reduce both overhead and operational costs is underway.

“Further restructuring has already commenced and, sadly, this will involve redundancies in some areas of the Group.”

North Midland merged its highways and utilities arms earlier this year and that division suffered a loss of £158,000 on a revenue of £7.61m during the quarter.

The bright spot for North Midland was its specialist water arm NMC Nomenca which will report as a stand alone division from this financial year.

The division made a a profit of £0.43m on a revenue of £17.59m.

Moyle said: “The UK construction industry has now been in decline for more than two years and the sector is still contracting.

“This has lead to wafer thin margins and some evidence of “suicidal bidding”.

“Several of our competitors have already issued profit warnings this year.

“The Group’s strength is its varied client base and broad spread of capability across the whole construction sector, with a strong presence in the water industry, which still has prospects for growth.

“The squeeze on margins is having a material effect on our supply chain and in many cases it is really struggling.

“To ensure certain sub contractors’ survival, detrimental payment terms to the Group are having to be agreed.  This again has a detrimental effect on cash flow.”

Birse will start on site this summer after winning a £22m road deal from East Riding of Yorkshire Council.

Birse has been confirmed as the main contractor to deliver the Beverley Integrated Transport Plan (BITP).

Work is anticipated to be complete by early 2015.

The scheme will include the Beverley Southern Relief Road, amendments to the Grovehill junction, Swinemoor roundabout and Flemingate level crossing and signing works to reclassify the road network in and around Beverley.

Councillor Stephen Parnaby OBE, leader of East Riding of Yorkshire Council, said: “The appointment of a contractor for this important highways scheme is another significant milestone passed and in Birse Civils Limited we have a Yorkshire contractor delivering the project, providing a timely boost for the construction industry.

“BITP represents excellent value for money and will result in improved transport infrastructure for Beverley in the long-term, plus immediate benefits such as the involvement of the local business community in its delivery, safeguarding jobs and providing the opportunity for local young people to gain valuable work experience and improve employability and skills.

Stephen Semple, spokesperson for Birse Civils, said: “Our experience in coordinating complex civil engineering works within a live highway environment will help ensure that disruption to the local community and travelling public is kept to a minimum.”

Paragon turned over £22m in 2011 and made a post-tax profit of £600,000. It will now become part of Interserve’s construction division.

Since being set up in 2005, the firm has completed 350 project with a combined value of more than £100m.

Most of the firm’s contracts are below £1.5m, specialising in the financial market in London.

The acquisition provides Interserve with access to the high-end re-fit market, which has maintained its value during the downturn and which offers further opportunities as economic conditions improve.

Ian Renhard, managing director – Construction said: “This acquisition enhances our existing fit-out and interior services and provides us with additional revenue, most specifically, in the London and south-east fit-out market.

“All indicators show that the London refurbishment market performed well throughout the last five years and this acquisition puts us in a good position to take advantage of expected growth and provides the opportunity to develop services to new and existing clients across the Interserve Group.”

Pascal Mittermaier will start later this Summer.

He is currently Head of Sustainability at Lend Lease and has helped deliver some of the most prestigious developments to date in Britain – including the London 2012 Athletes’ Village.

He has been closely involved with the Elephant & Castle project throughout its duration and is already embedded within the team in advance of taking up his new position in August.

Mittermaier will replace Rob Deck, the current Project Director who is returning to Australia to take up a new role leading a major Lend Lease regeneration project.

Lend Lease has obtained planning approval of the masterplan for the Heygate Estate and the successful sales launch of more than 500 new homes at One The Elephant and Trafalgar Place.

Mark Dickinson, Managing Director for Development at Lend Lease, said: “I am extremely pleased that Pascal is deepening his involvement with the regeneration of Elephant & Castle.

“His experience of delivering innovative and large scale developments will play a vital role in transforming this part of Central London into one of the most vibrant places to live in the capital.

“His expertise in sustainability will ensure that the new Elephant & Castle is an exemplar for green building.

“His approach to sustainability is about creating safe, healthy and enjoyable places to live as well as meeting demanding environmental targets.

“I would also like to thank Rob Deck for his contribution to the progress which we have made at Elephant & Castle.”

Pascal Mittermaier added: “I am looking forward to working closely with Southwark Council and the people who live locally to create one of the most exciting and transformative developments which London has seen in decades.”

A High Court hearing is due to start in January following a series of claims and counter-claims after alleged construction faults saw the scheme bust its budget.

The council’s cabinet will meet next week to decide on its approach for a new round of mediation.

Cllr Noel Kavanagh, the deputy leader of the council’s Labour group and its newly-appointed transport spokesman, told the Cambridge News it may be time to call a truce.

He said: “The council should come to an agreement with Bam Nuttall rather than trying to fight it out in court because the only benefits from that would be the lawyers and I would have thought the cabinet would be trying to save as much money as possible.

“There comes a point where you have to negotiate an agreement which is satisfactory to both sides and it sounds as though it would be sensible for the cabinet to come to an agreement because the courts could go against the council and leave the council with a high bill.”

At the heart of the dispute is whether the council should pay Bam Nuttall the £87m fee which was originally agreed, or the £161m the company says it spent.

If the council lost all of its case the total cost of the project could soar to nearly £230m – leaving the authority facing a £100m bill.

A council spokesman said: “The county council remains confident of its position in regard to the outcome of the contract dispute with Bam Nuttall.

“Mediation is a routine requirement for this kind of legal proceeding which is undertaken by the parties for the purposes of achieving an early settlement and this cabinet discussion will seek to finalise the county council arrangements for taking a full and informed part in the mediation discussions.”

A Bam Nuttall spokesman said it was unable to comment because of the ongoing dispute.

The Enquirer understands that the contractor has sealed its latest win in Islington with the 85 Canonbury Road job.

Work will involve demolition of the existing building and structures on the site and the construction of two buildings – one five storey facing onto Canonbury Road and one four storey facing onto Compton Avenue containing 90 apartments

The plans have been scaled-down from an original seven-storey scheme which was rejected by planners after complaints about its scale from local residents.

Ardmore is believed to have beaten off competition from United House, Galliford Try and Higgins.

One source close to the project said: “Nothing has been made public yet, but it looks like Ardmore has got this one.”

Work is scheduled to start on site next month.

The job for One Housing Group forms part of a £56m haul of work for the firm’s partnership’s arm.

Galliford Try will build the £17.8m Batavia Road scheme in New Cross, which will see outdated 1980s industrial sheds redeveloped with ground floor office sand shops with housing above.

The project will create 114 new mixed-tenure homes, including 101 for private sale, and associated public realm works in the New Cross area of Lewisham.

The partnerships arm also has been selected by clients in the South West, North West and North East to deliver a further 13 affordable housing projects which will involve building 392 new homes across the country in contracts worth a combined £38m.

Construction on the derelict seven acre site is now scheduled to start in September.

The scheme will include the 80,000 sq ft Morrisons alongside 183 private residential units, over 50,000 sq ft of retail and restaurant space, new public realm and a primary school.

Michael Marx, CEO, Development Securities said: “We are very pleased to have secured planning at 399 Edgware Road, a scheme that demonstrates our strategy of creating value through the regeneration of redundant and undervalued real estate.

“It has been a priority for us for several years to unlock cash from our non-income producing legacy assets and the progress announced today is a significant step forward in this regard.

“We look forward to announcing positive news concerning the funding and delivery of this scheme in the near-term.”

Following an extensive procurement process involving both resident board members and L&Q staff, contractors Apollo, Lakehouse, Mitie and United House signed contracts last week.

The contracts include replacement of kitchens, bathrooms, new gas central heating systems and electrical rewiring.

Specialist works will include asbestos surveying and removal if necessary and major adaptation works for residents with mobility issues.

Matthew Drake, L&Q Head of Programme Management said: “We have worked together with our residents to make sure we appointed the best suppliers to carry out this important refurbishment programme.”

“The new contracts will also provide employment opportunities for local people.”