North Midland Building is now being restructured with job losses due as the reorganisation “will result in significant overhead reduction and improved performance.”
The building division lost £1.94m during the six months to June 30 on revenue of just £11m.
The outfit’s biggest contract ran into trouble which “will result in a claim for losses incurred” while problems on two other completed jobs added to the woes.
North Midland Construction Chairman Robert Moyle, commenting on the building division,said: “Market conditions remain extremely difficult with very competitive margins.
“The workload for the remainder of the year currently is £7 million. Reorganisation of the subsidiary is currently underway and this will result in significant overhead reduction and improved performance.”
The poor building performance saw group pre-tax profits fall to £1.3m from £2m despite turnover increasing 17% to £91.3m.
North Midlands M&E subsidiary Nomenca enjoyed a strong start to the year thanks to AMP5 water spending which saw turnover jump 63% to £29.3m and profit up 96% to £460,000.
Civil engineering performance was flat with turnover at £23m making a profit of £760,000.
Highways enjoyed a better start to the year despite spending cuts with turnover and profit up 21.7% and 78.7% respectively.
Turnover was up in the utilities division by 5.5% to £20.3m but profit fell 33% to £600,000.