A tug boat business saw profits fall by a quarter after it was forced to write off nearly half a million pounds when a shipyard went bust.

GPS Marine, which transports cargo by barge and carries out engineering and building projects, suffered a 23% fall in pre-tax profits to £1.3m, its most recent accounts show.

It came after it wrote off £445,000 after the collapse of Acorn Shipyard in Rochester.

The company, which operates from its base in Upnor had nearly completed building a grid iron when the shipyard filed for administration.

Yet GPS, which employs about 70 people, improved its overall profitability and increased earnings in 2016.

Turnover grew by 4% to £13.3m, while its gross profit percentage jumped to 32.8% from 24.1%.

Managing director John Spencer said the company has since enjoyed a successful 2017 thanks to major infrastructure projects along the Thames.

He added the firm has been helped by “the growing realisation amongst regulators, councils, developers and major construction companies that the transport of goods by water not only delivers significant benefits for the environment and traffic congestion, but is also highly cost effective”.

This year the business will complete work on the Northern Line Extension Project, where it has moved more than 840,000 tons of spoil by barge from Battersea to East Tilbury.

It will also start work on the Tideway Tunnel Project, which will build a major sewer under the capital.

It holds contracts to transport more than two million tonnes of material on the Thames to and from sites in central London.

Mr Spencer said: “These contracts, combined with an expansion of long term freight business on the Thames and a long awaited strengthening of the offshore sector, help to create a sense of optimism in the business despite the underlying uncertainties generated by Brexit.”

In its 2016 accounts the firm also mentioned a decision taken in late 2015 to refrain from taking an active part in the offshore and distance towage markets.

Mr Spencer said this “was vindicated in 2016 by the continued weakness of these markets”.