The firm’s building and civil division was hit be a long running dispute of a loss-making building contract, which is still working through the books.
North Midland’s utility arm also has been hit by spending drying up in the telecomms sector, which saw a 60% fall in turnover in the first six months of the year.
The problems knocked group pre-tax profit for the first half of 2012, which fell from £1.3m to £0.11m on revenue reduced by 18% to £75m.
Chairman Robert Moyle said: “These results are extremely disappointing and are exacerbated by one off provisions and the overall decline in UK construction sector output, which has become significantly more pronounced in the first half of this year.
“Restructuring is ongoing to reduce the cost base to accommodate this market shrinkage in the short term and provide a platform for growth in the future.
He said that expenditure by telecoms clients had been severely curtailed causing turnover to slump to £8.4m and running up a loss of £0.22m.
“A restructuring programme had been implemented to deliver significant cost reduction, however the severity and scale of the expenditure cutback will necessitate a further reduction in the scale of the business to match the current market.
He added: “On a positive note, utility work has been secured on the Nottingham Tram extension.”
The firm’s Nomenca specialist water contracting business maintained growth, with revenue up 32% to £38.7m and profitability rising by 8.7% to £0.50m.