SHEPHERD Group, the York-based family run construction firm which has grown to be the 13th biggest private company in the UK, has reported flat earnings of £10.1 million off the back of falling revenues.

The Huntington headquartered firm, which employs 3,200 staff across its three divisions, saw turnover fall to £686 million in the year ending June 30, 2014, down from £748 million in the previous year.

The group hailed its Portakabin division as its "primary source of quality earnings" reflecting on significant investment in hire fleet assets and the acquisition of Oecon in August 2013 as a German subsidiary for the firm, which is performing "ahead of expectations".

However while describing results for Shepherd Engineering Services, Shepherd Homes and Shepherd FM as encouraging, the group said it was disappointed by the performance of Shepherd Construction and Shepherd Group Engineering.

However bosses said "decisive mitigating action has been taken".

David Williams, who was appointed Shepherd Group chairman in July, said: "As a company with nearly 125 years heritage, Shepherd Group has a strong history adapting to market opportunities as they evolve.

"The Group Board’s strategy remains to improve focus on the areas of the Group which have the greatest sustainable development opportunities.

"We are currently reviewing our businesses, assessing their strengths and weaknesses in relation to their markets, sector norms and peer performances to ensure that we continue to bring a sharper focus to those areas of the Group where the most significant future investment will be made.

"Our view is that although the economic climate is improving there is still a need for caution.

"While there are concerns over specific sector and operational issues, the medium term prospects for the Group are positive."

Breaking down the Group, Shepherd reported "considerable increases" in pre-tax profits for Portakabin, rising by almost a third, with the division's earning from its hire operation "continuing to underpin the performance of the Group".

Within the Shepherd Group Built Environment division, Shepherd Construction's performance was affected "challenging contracts" which have now been completed. The Group Board also said it has "acted swiftly" to restructure and reorganise Shepherd Construction to "address the issues which cause severe and reoccurring adverse impacts on Group performance".

The division also saw Shepherd Homes more than doubled its pre-tax earnings as the business took advantage of improved market conditions and the “Help to Buy” scheme.

The Group's new division Shepherd Group Engineering was described as having a "difficult first phase" after being formed out of the Portasilo and Portastor businesses.

The board said its profits were affected by problems with large legacy contracts and the costs of divisional restructuring and strengthening.