The firm confirmed that its plans to streamline the business in the New Year would also see around 50 jobs cuts.

In August, Severfield unveiled plans to consolidate Severfield-Rowen Structures, Watson Steel Structures and site erection firm Steelcraft Erection Services into a new business called Severfield-Watson Structures from 1 January 2013.

Tom Haughey, chief executive officer said today that performances of these firms had been adversely affected by unfavourable final account settlements and cost overruns on a small number of contracts.

He said: “UK profitability in 2012 is now expected to be materially lower, as a result of the performance.”

Haughey added that the restructure would deliver overhead savings of more than than £2m.

He said: “Combined with improved performance in contract engagement and execution, this would return operating margins to between 5% and 6%, over time.”

Haughey said that the business this year had been hit by a small number of projects at three of its businesses.

He said that Atlas Ward Structures and Fisher Engineering continued to perform well and once the benefits of the restructuring had taken hold Severfield Rowen expected to see a recovery in business performance starting in 2013.