UNEXPECTED project delays has led to losses of £1 million and a banking covenant breach for York-based attraction designer and operator Paragon Entertainment.

Announcing its full year results yesterday, for the year ending December 31, 2014, the Elvington-based firm revealed a £1.8 million year on year drop in revenues, down to £7.7 million.

With a EBITDA (earnings before interest, tax, depreciation and amortization) of minus £100,000, and an overall loss of £1 million, the firm breached finance arrangements with lender HSBC, however it said it is now "engaging constructively" with the bank after it agreed not to take action.

The financial results announcement included news of the departure of Paragon's chief financial officer Richard Arden, who will leave the business on July 31.

Despite being in the red, which bosses have attributed to unexpected project delays, Paragon has reported a "robust platform for growth" with confirmed orders of more than £15 million to the end of 2016.

Chief executive Mark Pyrah said: "Despite facing challenges in 2014, we have successfully retained our market leading position, and completed numerous UK and overseas projects including specialist design and build at the Museum of Kazakhstan, IWM First World War Galleries, Harrods and Glasgow Hospital.

"We are a leader in our industry through our well-known client base and innovative work. This is proving crucial to the growth of our new divisions and underscores our confidence in our strategic five-year plan.

"We have produced some amazing work and our pipeline has gone from strength to strength giving us assurance of the sector size for the future and the strategic relationships we have formed during 2014 have given us a robust platform for growth.

"We aim to consolidate our market leading position over the next five years by remaining focused on delivering extraordinary, enriching and exciting attractions experiences.

"Our confidence is rooted in a team with unparalleled capabilities unique to our industry, coupled with a constructive and co-operative approach to all our business dealings."

Paragon Entertainment is the parent company of three businesses, with the core subsidiary being Paragon Creative; a visitor attraction design, production and fit-out business.

The group is also made up of visitor attraction licensing company Paragon Entertainment (Attractions), and attraction consultancy, feasibility and operations company The Visitor Attraction Company.

During the last financial year Paragon sold its own attraction Quest in Merry Hill, near Birmingham, due to underperformance in a move set to save the business between £100.000 and £150,000 each year in operating costs.

Paragon chairman Mark Taylor said: "Our core subsidiary, Paragon Creative, is a family attractions and heritage design and build contractor with lumpy revenue and good margins.

"Out plan is to grow Creative while using it as the flywheel off which we intend to diversify the company into two further areas of business, Attractions on the one hand, and Licensing and Distribution on the other."