T Clarke is confident about future prospects after issues surrounding two problem contract were resolved, the firm has said.

The building services contractor yesterday reported a pre-tax loss of £1.7 million for 2014 despite making record revenues.

Profits were hit by two issues that the company says it has now resolved. One was a damages claim relating to a contract carried out by a subsidiary before TClarke acquired it, and the other was a protracted final account settlement in the Mission Critical division.

Group revenue was up nearly 5 per cent to £227.5m (2013: £217.1m) although underlying operating profit slumped to £1.4m (2013: £3.2m) representing a margin of just 0.6 per cent.

Revenue from operations in the south was down 2.7 per cent year on year at £167.6m (2013: £172.2m). The region reported an operating loss of £2.2m (2013: profit £0.5m).

Revenue from operations in the north increased by 38 per cent to £43.4m (2013: £31.4m) but operating profit was reduced to £1.4m (2013: £1.5m).

Chairman David Henderson admitted that the claims had caused him “sleepless nights” but said if the costs to these were set aside, then the overall performance of the group was successful.

He said: “In the second half of the year, you could say ‘the decks were cleared for action’ – and we saw action in the shape of a series of significant contract wins in London and also, though less widely reported at the time, across the rest of the UK.”

Forward order book at the end of the year was £300m and chief executive Mark Lawrence said the company was now well positioned for growth.

“Two issues impacted profitability last year; they are fully resolved and so, with improving markets, we are free to focus on rebuilding the profitability of the group,” he said.

“TClarke has weathered the storm well. Although remaining cautious and prudent in our planning, we can see clearly now that the market is increasingly less price-driven and increasingly more resource-focused. In plain terms, developers and principal contractors are looking to secure and lock in high quality teams for their projects in order to deliver them on time and on budget.”

He added: “From a strategic perspective, TClarke now has the opportunity to grow in all of its markets and to become, during the years of upturn, a more significant player in a range of specialist sectors and markets.”