The building and maintenance firm said it had pulled out of loss-making contracts and restructured the specialist business to limit any further trading damage.

“This issue has been dealt with swiftly and decisively so that it should not recur, although it will contribute to the reduction in profits in the first half of the year,” said chairman Stephen Petit in a trading update.

He added that severe weather conditions earlier in the year had hit Rok’s big maintenance and improvement business, particularly its insurance repairs side.

He said: “Our expectation at the time was that these conditions would result in a backlog of work, so that the impact would largely be one of timing.

“This has so far been the case and the backlog is being progressively reduced. The recovery process is taking time and there will therefore be an impact on profits for the first half of the year.”

Rok said its social housing side traded well in the first half of the year with no signs of a slow down in work opportunities.

City analysts had previously expected pre-tax profits for the year to be around £21m.

The firm is counting on the success of social housing PFI in future. It  is preferred bidder on the Gateways to Oldham PFI scheme and is down to the last two bidders on a further two major schemes.

At the construction business Rok said it was being selective about bidding for projects and as a result margins had held up well.

Expected future revenue from frameworks and current orders stand at £2bn.