The Middlesex-based firm said it reviewed its business operations and was pulling out of bidding future rail work as well as also winding down its national multi-utility services operation for developers.

Chairman Kevin Clancy said that the business was committed to direct delivery and future-proofing Clancy against the industry risk of over-reliance of subcontractors in a diminishing marketplace.

This shift has already seen the proportion of directly employed against subcontractors rise to 69% from 57% in 2018.

After losing £3.2m in 2018, Clancy group edged back into a £274,500 pre-tax profit in the year to 31 March 2019, reflecting stronger performance by Clancy Docwra in turning around its loss-making contracts.

He said the business had built up a strong work bank and had a plan to exit all remaining loss-making contracts by the end of 2019/2020.

Clancy said: “The business has started to see the turnaround in performance that we predicted last year.

“Through stronger operational control, we have returned to profit as a group and are particularly proud of the improvement that we have made to our working capital, achieving an overall cash inflow of £18m.

“We are also pleased to have renewed a number of key contracts including frameworks with Southern Water, South East Water and UKPN, and our secured work is worth in excess of £1.2bn.”

He added: “We were shocked and deeply saddened by the death of Dermot Clancy in September 2019.

“His passion and energy throughout his career have been key in making the business what it is today.

“The legacy he wanted was a successful business secure in family hands, and we believe we are well-positioned to build on that.”