Privately owned contractor Shepherd’s pre-tax profit for last year was hit by the poor performance of its manufacturing division, which lost £5.5m.
The company’s annual report showed that pre-tax profit for the group fell 36% to £13.2m compared with £20.5m in 2000. Turnover increased 19% to £540.2m.

Chairman Paul Shepherd, who is to leave the firm next month, said poor accounting and control procedures were to blame for the £5.5m loss.

These problems were discovered last year after a computer system was installed, but Shepherd said the division’s underlying business was sound.

He said: “These problems have received the most rigorous remedial attention, with external support, to strengthen quality of accounting and control procedures.”

Shepherd’s housebuilding division was profitable but at a lower level than last year, whereas the firm’s property development arm produced record results. Shepherd Construction’s profit was identical to last year on similar turnover.