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ISG has announced it is to close its south-east regional construction office based in Tonbridge, which it expects will result in a loss from the discontinued operation of 拢3.5m in the current financial year.

The contractor said the move was part of a previously announced drive to restructure its UK construction business to focus on four regions, repeat customers and frameworks.

ISG said its UK regional construction business 鈥渃ontinues to face challenges鈥�, where 鈥渃urrent margins continue to be commercially challenging on projects entered into more than a year ago鈥�.

But the firm added: 鈥淗owever, with the market now improving and with recent project wins generally being secured under better procurement routes, we anticipate seeing an upturn in margins from 2015.鈥�

Elsewhere, ISG said it was benefitting from 鈥渟ignificant improvement in the majority of our core markets鈥�.

In a pre-close trading update for the year to 30 June 2014, ahead of full-year results to be published in September, ISG said its UK fit-out and engineering services business enjoyed 鈥渟ignificant revenue and profit growth in the second half of the year鈥�.

The firm said its retail business saw 鈥渋mprovement鈥�, while its Middle East and Asian businesses grew revenue and profit.

ISG鈥檚 order book increased 25% on the previous year to 拢1.05bn.