Chief executive Keith Miller said the firm was no longer bidding competitive work and had put the problem contracts behind it now to concentrate on framework jobs.

He said: “Miller Construction recorded an operating loss of £4.6m, primarily reflecting losses on a limited number of contracts that had been procured competitively on the basis of price.

“We have taken the necessary steps to deal with the loss-making contracts.”

“The business is now focused on frameworks and aligned to clients with long-term programmes of work,” he added.

Miller said the outlook for construction was now good from a record order book of £1.8bn (2012: £1.5bn) consisting of lower risk framework agreements, services, PPP and strategic client work.

A strong performance at the housing division helped to lift overall group profits to £10.4m from £6.6m in 2012.

Group turnover also jumped a third to £817m, driven mainly by a sharp rise in construction turnover from £260m in 2012 to £409m.

Improvements in the housing market helped to lift housing completions 12.1% to 2,053 units.

Private reservation rates rose 22.5% with significant improvement in the second half of the year.

He added that a focus on family housing in surburban locations had helped to lift average selling prices 6.5% to £181,000.