Client collapse tips Dawnus into the red

Aaron Morby 3 years ago
Share

Dawnus Construction ran up £1.2m of pre-tax losses last year after being hit by a drawn-out legal battle and client insolvency on a project.

Hotel in Poole is now complete and operates as a travelodge
Hotel in Poole is now complete and operates as a travelodge

Nicholas Down, group managing director, said the company had performed well over last year, focusing on building a strong customer base with a target of 80% of revenue from Government funded clients.

This was achieved by March this year, but the focus and belt-tightening saw revenue slide 17% to £119m.

The group would have returned a reasonable profit but was hit by costs from a long-running contract dispute.

“Subsequent to the year end the company has had to recognise significant write-downs on certain completed contracts where client solvency and the potential for substantial legal costs led to the directors taking the decision to write back carrying values by £3.1m leading to the loss,” said Down.

“The company no-longer contracts with clients of this nature and this write-down is one-off in nature,” he added.

The 2017 accounts do not name the project.

Although Dawnus has been wrapped up in protracted legal battles with a client over a 245-bed hotel complex in Poole in Dorset.

Back in 2015 work was halted on the £7m project when a pile struck high voltage power cables alerting Dawnus that drawings supplied by Scottish Electric Power Distribution were incorrect, leading to 30-week delay.

Disputes later arose and there were four adjudications with the hotel project client Marsh Life. Dawnus was ultimately forced to seek enforcement action for around £1.5m in the High Court only to see the local client then collapse into liquidation last summer.

Latest news

Bouygues bags latest phase of Portobello Square regen

Construction to start next summer on North Kensington site
26 mins ago

Massive Stewart Milne development goes into administration

Countesswells new town now in hands of administrators
3 days ago

Race starts for £2.5bn Ministry of Justice framework

Frameworks cover projects up to £30m and are divided into regional lots
4 hours ago

London Uni submits North Acton high-rise tower cluster plan

Plans in for eight buildings ranging between 6-32 storeys in North Acton
3 hours ago

Galliard forms new partnership to build 850 homes

Work to start on £300m Brimingham and Ipswich developments by next spring
4 hours ago

Engineers battle to repair power network after Storm Arwen

Large sections of overhead power lines need to be rebuilt after "worst damage for 20 years"
4 hours ago

Leeds £270m Lisbon Square towers approved

Work to start in the Spring on residential and office scheme
13 hours ago

Green light for £65m canalside scheme in Wolverhamption

Construction to start next summer on transformation of brownfield site
4 hours ago

Ex-Laing O’Rourke boss to head rejigged BAM UK business

BAM names new chief for combined UK and Ireland businesses in growth push
3 days ago

Robertson submits £150m Cardiff Arena plan

Arena work to start next Autumn with wider Atlantic Wharf regen scheme to follow
4 days ago

HS2 pioneers first ‘box-slide’ bridge over motorway

BBV will start initial site preparation over the Christmas holiday period
4 days ago

Rocks smash site huts as quarry blast goes wrong

Breedon Trading Ltd fined £300,000 after court hears worker was forced to run for cover
3 days ago

Sellafield names £250m HVAC key delivery partners

Balfour Beatty Kilpatrick and EJ Parker Technical Services take first integrated team deal
4 days ago

Cut-price home builds quadruple maintenance cost

Mount Anvil study attempts to quantify link between Capex and Opex costs
3 days ago

Ray O’Rourke to step down from Group Chief Executive role

New CEO Seamus French to join from mining giant Anglo American
4 days ago

TClarke on track for £500m revenue target

Orders surge to £525m setting fresh record for M&E specialist
4 days ago

Northern contractors still reeling from rail cancellations

Firms fear "economic black hole which will have a huge impact on regional SME contractors"
4 days ago

Go-ahead for McAlpine’s £43m Edinburgh concert hall job

Work to start next year on first concert venue in Edinburgh for over 100 years
4 days ago

Miller Homes fined £200,000 for polluting dyke

Court hears details of second incident at same Huddersfield site
5 days ago

Plans in for £60m Stoke goods yard quarter

Bowmer & Kirkland are working on the scheme under a pre-construction agreement
4 days ago

Quinn Infrastructure goes into administration

Rail M&E specialist contractor stops work on sites
5 days ago

Farrans to build £30m rotating Glasgow footbridge

Steel price rises blamed for 40% jump in rotating bridge cost
5 days ago

Brickability buys renewable energy specialist

Materials distributor buys new housing green energy specialist
5 days ago

RSK swoops for Yorkshire surveying specialist

Infrastructure surveying specialist Centara employs 60 staff
5 days ago

Former Amey director takes reins at renamed SSE Contracting

Zak Houlahan to lead Enerveo from December
5 days ago

Bouygues wins £30m Swansea zero carbon office

Firm to break ground in coming weeks on The Kingsway project
5 days ago

Sisk names new UK framework director

Rebecca Hartshorn to take on Scape framework development
5 days ago

Expanded starts work on giant HS2 station box

Construction will see 690,000 cubic metres of clay removed
6 days ago

Builders slam plans for electric car chargers in all new homes

Construction firms will foot the bill while electricity companies make the profits
7 days ago

Kier set for £32m Bournemouth council flats job

Work to start next year on four blocks of flats rising to 10 storeys
6 days ago

Contractor services