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Contractor Morgan Sindall has reported a 15% fall in pre-tax profit for 2012 as restructuring cost the business 拢10m.

In its preliminary results for the year to 31 December 2012 the firm reported a fall in pre-tax profit to 拢34.2m from 拢40m the year before.

It also reported an 8% drop in revenue to 拢2bn from 拢2.2bn in 2011.

Plus, it said it had incurred one off costs totalling 拢10m in redundancy payments and property costs from restructuring its construction and infrastructure and affordable housing divisions.

Morgan Sindall鈥檚 construction and infrastructure arm reported an 8% fall in revenue to 拢1.2bn over the period. But it also said its margin had remained steady at 1.7% over the last two years.

The firm鈥檚 fit out arm held up reasonably well with revenue falling just 3% to 拢427m. But Morgan Sindall鈥檚 affordable housing business saw revenue fall 17% to 拢386m with margins falling from 1.5% to 1.3%.

However, its urban regeneration arm reported a 9% rise in revenue to 拢62m over the period. The firm said it expected returns on its investment in regeneration to grow in 2014.

John Morgan, Morgan Sindall chief executive, said he estimated the market had fallen between 20% and 25% from its peak and therefore these were a solid set of results.

鈥淲e continue to face challenges including reductions in public spending, deferred investment decisions and higher levels of competition,鈥� he said.

鈥淥ur strategy remains to invest the cash generated from our construction-related activities in our regeneration-related activities, namely affordable housing and urban regeneration.  This strategy is being tested by a drop in construction revenues and tighter payment terms from clients.鈥�

He said the firm was being more selective with its investments in regeneration schemes and infrastructure projects.

Morgan Sindall also reported a 35% fall in the valuation of its investment portfolio to 拢32m from 拢49m although this valuation included the sale of its medical property investments for 拢24m during the year.

Morgan said he expected the firm鈥檚 markets, particularly in the fit-out and construction sectors, to remain tough. 鈥淭he overall market isn鈥檛 going to improve so we have to improve to be in a better position,鈥� he said.