Formation progressing on East End project

Construction and property development company Formation Group is a much changed business since it offloaded five of its nine subsidiaries by means of a management buy out, but it still faces challenging conditions, chairman John Lawrence said.The group reported revenue from continuing operations of 18.95m in the year to 31 August 2009, down from £25.01m the year before. The company plunged into the red in 2009, losing £2.92m before tax and an exceptional charge of £17.82m, after making a pre-tax profit of £0.67m a year earlier.Progress on the development of Commercial Street, in London's East End, ground to a halt in the wake of the collapse of Heritable Bank in 2008 but the group has now taken steps to complete the development by securing the land from Heritable's administrators.'The next stage on the pathway to achieving this objective [completing the Commercial Street development] is to secure new, post Heritable Bank funding in order to build out the development,' Lawrence said. Talks are now in progress to get funding in place, after which construction works can re-commence. 'There has also been substantial sales interest for large parts of the development and given its location, the board remains optimistic that we will successfully navigate our way through this difficult situation,' Lawrence added.The company has decided not to resume dividend payments at this juncture but the decision will be reviewed at the time of the interim results.