Troubled engineering-group Mowlem says that its chairman is quitting.

Mowlem, which has an office in Wolverhampton, said Charles Fisher had decided to step aside when a successor is appointed, although the company did not give a date for his departure.

The group denied that his decision was linked to problems that led it to report annual losses in the year to December 31 of £7.4 million in March.

It has embarked on a business shake-up to improve its performance after suffering accounting write-downs on UK construction contracts and losses in its Australian building business.

His resignation follows the departure at the start of the year of chief executive Sir John Gains and of finance director Gerald Brown in February.

A spokesman said Mr Fisher's decision was "absolutely personal" and had nothing to do with the firm's recent difficulties. "He just feels it's the right time to pass on the mantle," he said.

Mr Fisher, who is also a non-executive director of builders merchant Travis Perkins, engineering group Delta and Baggeridge Brick, has spent 12 years on Mowlem's board, three of which were as chairman.

He told the group's annual meeting that trading during the early part of 2005 had met expectations.

Chief executive Simon Vivian has made a number of changes in a bid to return Mowlem to profitability since completing a review earlier this year.

The group, which is involved in a number of markets including Government Private Finance Initiative projects and rail work, said it was splitting construction services into three divisions - Mowlem Building, Mowlem Infrastructure and Mowlem Engineering.

It said the changes would save the company money and make its operations more efficient.

Earlier this month, Network Rail decided to remove Mowlem from a £3 million rail contract after the firm left off clips that secure track to sleepers on the West Coast Main Line.

NR said it had decided not to renew the deal and also suspended Mowlem from carrying out any other track renewals until it had made management and work practice improvements.