The firm said it had been forced to cut capacity at its loss-making Bell & Webster Concrete and Milbury Systems businesses because of a downturn in demand for student accommodation and hotel construction activity.

A new business division ElecoPrecast has been formed under a new management team to steer the streamlined business.

John Ketteley, Eleco executive chairman said the restructuring of its precast concrete interests as well as a welcome improvement in the performance of it roofing and cladding products operations came too late to return ElecoBuild to profit in the first six months of the year.

He said: “ElecoBuild’s costs and production capacity over the past three years have been substantially reduced so as to bring them into line with the lower levels of activity in the UK construction industry.

“As a consequence, we believe that ElecoBuild is now in a better position to respond and take advantage of an upturn in demand.”

In the first half of the year ElecoBuild made an operating loss of £418,000 before exceptional redundancy costs on turnover slightly down at £10.1m.

Overall the group, which includes construction software products, made a pre-tax loss of £480,000 on stable turnover of £18m.