Dawn Group Defends Construction Arm Closure

Dawn Group has defended its decision to close its construction arm after another branch of the business made a loss in the last financial year, The Herald newspaper has reported.

The company announced earlier this year that it would close the construction side of its business in order to focus on development and housebuilding.

But while its construction wing made a £4m profit in the year to January 31, Dawn's homes division lost £1.2m in the same period.


The loss is in part due to a bill the company faced in order to get out of an interest swap agreement with Bank of Scotland.

In February, Dawn announced plans for an orderly closure of its general construction arm, citing a "major slowdown in the main contractor market".

It is expected about 60 jobs will be lost by the time the division is closed down next summer.

But accounts the company have now filed show the homes division is less profitable than the construction arm.

Finance director Stewart Rough said the company had made the right decision, saying contracts that boosted the construction arm last year were won early in the year and may not be repeated.

He said: "When you look at jobs that were being tendered at the end of the year the margins were non-existent in them. It was not a sustainable long-term business."

Mr Rough said the construction market could remain flat for five years.

(NE)