The firm said the restructuring saw its Interiors and Retail businesses combined under a single management team and the Construction division reorganised to right-size the group for a more challenging market.

Paul Drechsler, chairman and chief executive of the Wates Group, said the streamlining would bring annualised savings of £18.5m while the business continued to look for more efficiencies.

He added: “The business will continue to target further improvements to deliver value and improve efficiency.

“Reduced demand for construction, some unsustainable pricing by competitors and an increasing number of supply chain failures combined to create the most demanding trading conditions in 2012.” said Drechsler.

“This, together with some operational challenges, placed pressure on our margins in the construction business,” he said.

Despite this turnover rose 7% to £1.2bn with underlying profits down 11% at £29m.

The order book remained robust at £1.6bn, but down from £2bn the year before.

Drechsler added: “2013 has got off to a more positive start for the construction industry, with housebuilding in particular seeing some recovery.

“We believe there are great business opportunities for Wates in what will continue to be a challenging and uncertain market.”