Difficulties at the construction consultancy Sweett Group’s Middle East division led to a loss of £700,000 (Dh4.04 million) last year.
While the UK-based group’s global revenues fell 1 per cent to £88.3m from £89.4m a year earlier, in the Middle East sales declined by 34 per cent to £6.6m from £10m the previous year.
The division also reported an operating loss before goodwill write-offs and other expenses of £1.2m compared with an operating profit of £100,000 last year. Its regional pipeline of new projects also fell to £5m from £6m.
The chief executive Douglas McCormick described trading in the region, where it has offices in Dubai, Abu Dhabi, Riyadh and Muscat, as “difficult”.
He said: “We are looking to stabilise the business, reduce our cost base and move to trading profitably”.
Sweett Group is also the subject of a continuing investigation by the UK’s Serious Fraud Office (SFO) into allegations that a former Dubai-based executive had sought payments from an architecture company in return for the award of a contract to build a hospital in Morocco.
The allegations came to light in June 2013 following the publication of an article in The Wall Street Journal. Sweett Group racked up £1.7m of exceptional administrative expenses during the year, which it said were “incurred in the main in investigating The Wall Street Journal allegations and in connection with the SFO investigation”.
The SFO investigation, which was launched last July, is continuing.
The company’s shares fell 10 per cent to 22.5 pence late afternoon UAE time.
A recent survey by the accountancy firm EY found that only 52 per cent of companies in the Mena region have an anti-bribery or anti-corruption policy in place.
It argued that market uncertainty and geopolitical instability is creating greater risks for firms across the region, with 52 per cent of respondents stating that management is under pressure to expand into higher-risk markets.
“There is an urgent need at the board level to make compliance more of a focus,” said Stuart Jones Jr, the executive director at EY Mena.
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