In a statement this morning, the firm said: “An ongoing review of the few remaining outstanding legacy contracts, which were secured at the height of the recession, is expected to result in further provisions being required.

“These expected further provisions reflect a prudent approach with commercial negotiations and contractual claims ongoing in respect of these outstanding legacy contracts.

“Management now expects a materially larger loss before tax for the full year as a result of these increased accounting provisions.”

At the half year NMC managed to scrape back into profit, despite further losses at its building and civils arm.

The firm’s water engineering business NMCNomenca salvaged the group, helping to return half-year pre-tax profits of £370,000 after a £6m loss last year.

But the firm said that the underlying profitability and revenue of the business for the full-year would now likely exceed management’s expectations.

At year-end, net cash was £1.7m and cash balances were £5.3m, allowing sufficient headroom to support growth going forward, said the firm.

Earlier this year North Midland Construction won a £10m contract to deliver the Leeds-Bradford Cycle Superhighway scheme at a keener price than the client initially expected.

The full year audited figures will be released to the market on Monday 20 April 2015.