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Lend Lease鈥檚 European construction business has fallen further into the red, despite a slight rise in revenue.

The firm鈥檚 European construction arm reported an operating loss of 拢9.3m (Aust $17.2m) in the six months to 31 December 2013, down from an operating profit of 拢4.8m (Aust $8.8m) over the same period of 2012.

The construction arm鈥檚 loss in the last six months of 2013 exceeded its loss for its previous full year results, when it reported an operating loss of 拢7.9m (Aust $14.6m) for the year to 30 June 2013.

However, the European construction business reported a 1% rise in revenue to 拢268m (Aust $496m) in the last six months of 2013, up from 拢264m (Aust $489m) in the last half of 2012.

In its results the firm said the loss at its construction arm was due to 鈥渞educed margins across the UK and Italy鈥�; 鈥渄isposal of the Spanish construction business鈥�; and 鈥渢he cost of restructuring operations in the UK鈥�.

The firm鈥檚 whole European business including its development, investment and infrastructure arms reported a fall in operating profit to 拢8.4m (Aust $15.6m) in the six months to 31 December 2013, down from 拢35.5m (Aust $65.8m).

It reported an increase in revenue to 拢359m (Aust $665m) in the last six months of 2013, up from 拢324m (Aust $600m) over the same period of 2012.

Victoria Quinlan, chief financial officer for Lend Lease Europe, said the sale of the firm鈥檚 Spanish construction business had the largest impact on the European construction arm鈥檚 profit.

鈥淲e were not one of the big players out in Spain and we didn鈥檛 want to take on contracts where we couldn鈥檛 control things such as safety,鈥� she said.

She said that she did not expect restructuring costs in the UK to have much impact on profitability in the future.

鈥淲e have really reconsolidated and reset our baseline. We know what we want to do and we want to bid for large projects in the UK,鈥� she said.

She added that without these two costs Lend Lease鈥檚 European construction business would 鈥渄efinitely be looking at not such a significant loss鈥� and would be closer to 鈥渂reaking even鈥�.

Quinlan added that she expected the construction business in Europe to be back to profit in 鈥�12 to 18 months鈥�. 鈥淚t鈥檚 partly to do with scale and getting the business back to a large scale business,鈥� she said.

She said the firm was focused on targeting 鈥渋ntelligent鈥� clients to grow its construction work, which she expected to account for the 鈥渓ions share鈥� of growth in coming years.