The financial performance of public sector consultant Tribal was blighted by tight margins in the last financial year, leading to a pre-tax loss of £200,000 for the year to 31 March.

This compared with a £5.3m profit for the previous year.

The company said margins had been eroded by the need for changes in the organisation.

Operating profit fell 6% in the consulting arm, which represented £55m of the £229m turnover. This was a consequence of the restructure, more competition and higher costs because of skills shortages.

In the property division, Tribal said the acquisition of architect Derek Hicks & Thew had helped increase revenue to £21.3m. The firm said this was because it had extended its geographical coverage and increased capital spending.

Tribal’s start-up business Mercury Health won a £214m contract with the NHS to design, build and staff a network of treatment centres. Tribal said it expected to pick up more contracts from the government, which plans to announce projects worth £4bn over the next five years.

Chief executive Henry Pitman said: “We have now completed our organisational restructuring and are well advanced in our integration process. We have won several major contracts, which demonstrate the potential of the Tribal model.”

Tribal recommended a total dividend for the year of 3p.