A construction contractor suffered pre-tax losses of more than £1.1 million in what bosses described as the “worst year” of more than half a century of trading.

Walker Construction, based in Ashford and Folkestone, fell into the red after contractual disputes with a national contractor, which it eventually settled out of court.

The company, which built the Memorial Arch in Folkestone, opened by Prince Harry, had made a pre-tax profit of nearly £420,000 the previous year, its latest accounts show.

However it took heavy losses on two contracts “due to unforeseen problems” despite increasing turnover by 5% to £50.3 million in the year to the end of March 2016.

Managing director Phil Webb said: “It was probably the worst year in our 50 years of trading.

“We had a couple of particularly bad contracts which didn’t go well for us. One was for another national contractor and we had to make a decision whether to continue the claim or just settle to get it out the way and get the cash in the bank.

“We have only been in arbitration two or three times in our 50 years of trading.

“No one wins apart from the lawyers and this contractor was bigger than us.

“We took the commercial decision to settle.”

Walker, which employs about 250 people, will return to operating profit when it reports its financial results for the year to the end of March 2017, according to Mr Webb.

“The last year has been much more positive,” he said. “We have got rid of the legacy of two bad contracts and we are back in a profit-making situation.”

Mr Webb said no lasting damage had been left by the disputes.

“We are still working with large contractors,” he said.

“We just have to be more aware of the way we manage them.

“We will probably take a more hard line with that contractor but we are in contracting – it’s a risky business.”

Walker Construction was founded in north London in September 1964 by brothers Hector, Stephen and Raymond Walker and moved to Folkestone during the late 1960s.

Mr Webb said the firm had endured a slowdown in work between September and January, perhaps because of “the effects of Brexit”.

He said activity has since picked up.

The business is carrying £16 million of orders into the next financial year.

It has recently completed a £7 million fire station next to Rochester Airport, a £3.5 million fire station in Gillingham and the £3.2 million design and build of an extension to White Cliffs Primary College For the Arts in Dover.

Last month the company launched a recruitment drive for five to 10 management staff and another 20 to 30 site workers to meet demand.

Mr Webb said: “Tender inquiries are going through the roof.”