Accounts for Saudi Arabian-owned LSRM Holdings in the year to December 2023 reveal the Harrow-based M&E group suffered a £2.8m pre-tax loss last year after a small profit of around £450,000 in each of the previous two years.

Prior to this, the M&E contractor struggled with three years of accumulated losses of around £20m in total.

Revenue slipped by 19% to £122m, due to more selective tendering, although headcount rose marginally to 584 staff.

Among the key trading arms, the main M&E business Lorne Stewart lost £2.4m last year on revenue down 20%  at £119m.

Chief financial officer, Ramesh Krishnamurthy, said: “The last few years have been very challenging especially for the construction sector due to various economic and geo-political factors.

“Though we sought to engage with clients to manage the impacts of higher cost due to inflationary pressures, our efforts to finding a solution in a difficult environment have not always been accepted and resulted in increased build costs.

“This complex situation was further aggravated by supply chain insolvencies fueled by difficult market conditions and difficulty in recruiting and retaining a skilled workforce.”

He added that the outlook for 2024 was better now that inflationary pressures had eased and interest rates were expected to fall.

The group continues to focus on framework agreements and has secured several places during the year, where it hopes to become a preferred contractor delivering sustainable revenue and margins.

The business is looking at an optimum mix of both small and high-value jobs in order to have a consistent order book and a steady stream of revenue.

During the year cash fell to £10m from £14m in the prior year.