North Midland Construction has fallen to a £780,000 loss because of problems with building a £20m mansion in the midlands.
The company is building it for an individual whose identity it said it cannot reveal.
A trading statement by chairman Robert Moyle (pictured) said: “Losses have primarily emanated from major delays and cost overruns on the most significant project being undertaken and major reverses on two other completed projects.”
He said a further review had revealed that completion of the project would be further extended into the second half of 2012, with an expected overrun of £1.5m.
“A significant claim for the losses incurred on this contract is currently being pursued,” he said. Mr Moyle confirmed that the house was the project in question.
North Midland’s building operation lost £4.8m on revenues that were down by 24.2 per cent to £16.7m. The company issued a profit warning in November.
Mr Moyle’s statement said building was the industry sector worst affected by the downturn and “the market remains extremely competitive and the supply chain is finding survival extremely difficult”.
He told Construction News: “We’re not disappointed, projects are beginning to come through but gestation periods are slow due to lack of confidence but our order book is good.”
NMC has merged its building and civil engineering operations as a result.
Its civil engineering revenue fell by 31per cent to £35.3m and operating profits by 16.7 per cent to £1.6m
There was better news at NMC’s highways operation, where revenue increased by 39.6 per cent to £18.8m and operating profits by 285% to £830,000.
Mechanical and electrical subsidiary Nomenca increased revenue by 70.7 per cent to a record £64.2m, with profitability climbing 36.8 percent to £1.03m million.
Its utilities division saw revenue down by 20 per cent to £32.2m following the loss of a Virgin Media term contract and operating profit fell by 59 per cent to £600,000 however new clients have been found in Energetics and Electricity North West.