Crest Nicholson's construction division Pearce, put up for sale this year, has posted a £1.4m loss for the six months to 30 April.
Pearce's loss compares with a £500,000 operating profit for the same period last year. Turnover increased 23% from £70.8m to £86.8m. The loss includes a £1m hit for closing one of its business units.

Crest Nicholson, which is predominantly a housebuilding and development business, said Pearce's specialist retail business traded strongly but that its leisure business was hit by the fall in hotel work after 11 September.

The group added that it expected that performance in the second half of the year would be stronger.

Crest Nicholson has been trying to sell Pearce since it decided the business was no longer part of its long-term strategy.

The Pearce sale hit trouble when Crest reissued a sale document, despite having received bids

A management buyout team is favourite to pick up the business after contractor YJL's bid failed last month. Pearce's managing director Don Ross is leading the bid.

Crest Nicholson's attempts to sell Pearce hit trouble in May when it reissued a sale document for the business, despite receiving bids in March. City sources said at the time that the bids were not high enough.

Crest Nicholson's overall pre-tax profit for the period rose £27% from £25.1m to £32m. Turnover increased £48.9m to £314m and unit sales were up 13 to 827.