The company issued a profit warning last November with problems highlighted in the telecoms sector and highways division.

It also launched a company-wide cost cutting drive last summer after running up losses at the building and utilities arms.

The firm said the move would not result in any redundancies.

North Midland said the merger is “a positive move to streamline the business, bringing together the two divisions who increasingly work collaboratively to deliver projects for a range of clients.”

The firm added: “Pooling skills, resources and experience will allow NMC to reduce costs and provide a foundation for future growth.”

Robert Moyle, Chairman and Chief Executive of NMC said: “With the retirement of the current Managing Director of Highways and Special Projects, Bob Sherlock and an increasing need to keep a tight reign on costs throughout continuing tough economic conditions, we took the opportunity to review the structure of the business.

“There are considerable synergies between the two divisions so bringing them together made complete sense and will open up opportunities for future growth.”

The new single division will be led by Geoff Poyzer who was previously Executive Operations Director for Highways and Special Projects.