North Midland said it was stepping up its cost-cutting drive and pulling out of the major building market following a disastrous start to the year.
Robert Moyle, Chairman said: “Major problems have been experienced within the building and civil engineering division during the period, with the division recording a loss of £1.58m on a revenue of £16.8m.
“Completion on the major problematical contract has still not been achieved and there were significant cost overruns on two other projects.
“The current market remains extremely competitive with the result that tendering failed to produce the required return.”
As a result North Midland delivered a group loss of £0.48 m in the first half of the year on group revenues up 20% to £90m.
The rest of the group covering highways and water process engineering returned profits.
Nomenca is delivering increased revenues, due to the recently incorporated frameworks of Anglian Water, the Southern division for Severn Trent Water and a contract for Ostara in Slough.