The construction arm of the Seddon Group, which only returned to profit of £2m last year after a prior year loss, was also hit by market inflation, project delays and fire safety remediation costs.

CEO Jonathan Seddon said: “Inflation has put pressure on our supply chain such that we have seen several failures of key subcontractors throughout 2022.

“This secondary cause of inflation increases our costs further due to disruption and increased cost of securing alternate subcontractors.”

He said that turnover was down 10% to £150m over the year mainly driven by delayed or cancelled project commencements as the rising cost base affected their feasibility.

Seddon said: “The loss has primarily arisen on our larger build contracts which have been signed prior to the Russian invasion of Ukraine.

“These contracts, which had a total value in excess of over £100m and duration of 18 to 36 months, were all on a fixed price basis.”

He added that the financial position of each of these contracts was reviewed at the year end with full provision made in the accounts for all future losses.

Seddon said: “In the first half of 2023 trading has been satisfactory. Where appropriate, we have successfully negotiated inflation clauses with our clients which will protect all parties to each contract.”

He added that during the year Seddon also incurred significant costs related to fire prevention, litigation works together with costs rectifying other latest defects.

Seddon added that the firm still had a strong balance sheet with net assets of £22m (2021: £34m) and a year-end cash balance of £5m (2021: £8m).

Over the year the average headcount dropped 5% to 486 staff.