A £4.8m building loss dragged down the rest of the profitable divisions to record a group wide loss of £706,000 last year.

The building arm has been merged into the civil engineering division under new management and reduced overheads.

“This restructuring will enable the new division to operate effectively and profitably in what remains an extremely difficult market,” said chairman Robert Moyle.

“Building has been the most heavily affected by the current economic climate.  Credit conditions are very tight and developers, for whom the subsidiary has a proven track record, are finding it extremely difficult to generate new projects.

“The market remains extremely competitive and the supply chain is finding survival extremely difficult, which has had a material effect on this company’s business, particularly where the supply chain is either nominated or a specialist.”

Losses stemmed from major delays and cost overruns on its biggest project and major reverses on two other completed projects.Building revenues were down 24% to 16.7m.

North Midlands at a glance

Civil engineering: profits down 17% to £1.6m, turnover down 31% to £35m

Highways: profit up to £830,000, turnover up 40% to £19m

Utilities: profit down 59% to £600,000, turnover down 20% to £32m

Building: loss £4.8m, turnover down to £17m

Nomenca: Profit up 37% to £1m, turnover up 71% to £64m