Dawnus Construction ran up £1.2m of pre-tax losses last year after being hit by a client insolvency on a projects and the cost of the associated drawn-out legal battle.
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 the 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 piles struck high voltage power cables alerting Dawnus that drawing 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.
from Construction Enquirer http://www.constructionenquirer.com/2018/09/25/client-collapse-tips-dawnus-into-the-red/
via Tumblr http://ndbasilica.tumblr.com/post/178439790789
No comments:
Post a Comment