Contractor Mowlem has lost a court battle over a swimming pool in East Lothian, just weeks after its appeal over the Bath Spa project was rejected
Mowlem's results have also caused unease. Its share price fell 5.6% last week to close at 205p, after it was announced that profit in the construction arm fell 16% to £27m, compared with 2002.

The announcement of the latest court setback was made last Wednesday. The client, the Musselburgh and Fisherrow Co-Operative Society alleged that a swimming pool built by Mowlem at the Quayside Leisure Centre near Edinburgh had suffered from problems, including leaks.

The centre's operators launched a Court of Session action in February 2002, and judges have now found in its favour. Mowlem could be required to pay thousands of pounds in damages.

Last month Mowlem lost a legal wrangle concerning the £26m Bath Spa project. It had appealed against an injunction granted to the the city council last October. This prevented Mowlem from denying site access to another contractor hired to test peeling paint on the project.

  Commenting on Mowlem's latest results, finance director Gerry Brown said the fall in profit was the result of reorganisation costs. He said the arm should now be back on track.

Pre-tax profit for the group rose £12.1m to £45.2m because of the £15.6m sale of its PFI stake in the Greenwich Lewisham rail link in London. Turnover increased nearly £70m to more than £2bn.