Carillion has announced that its construction division saw profits rise by 69 per cent during the first six months of this year as it continued to reduce its UK business.

The organisation said that its operating margin climbed to 4.1 per cent, with operating profit going up from £15.3 million to £25.9 million in quarter one compared to the same period last year.

Revenue dropped from £950 million to £631.6 million after Carillion continued to re-scale its UK construction, while timing of project awards in the Middle East also played its part.

Philip Rogerson, chairman of Carillion, said that the company delivered a "robust" first-half performance which was in line with the expectations of the board, despite the fact that market conditions remained challenging.

"Given the strength of our business model, order book and pipeline of contract opportunities, we remain on track to deliver full-year results in line with expectations and to achieve our medium-term targets, namely to deliver growth in support services and to double our annual revenues in the Middle East and in Canada in the five-year period to 2015, in each case to around £1 billion."

A statement accompanying the results revealed that Carillion was benefitting from being "highly selective" over which construction contracts it bid for, while lower proposal costs and a "rigorous focus on cost management" were also praised.

The report said that revenue in the full year will be lower than it was in 2011 as the re-scaling of UK construction continued to align the business with the smaller market, offsetting growth in support services.

Earlier this year, Carillion told Construction News that it had finished trimming the number of jobs in its UK construction division after shedding around 1,750 workers between the middle of 2009 and the end of last year.

Richard Howson, group chief executive, said that it was planning to reduce revenue in this country from £1.8 billion in 2009 to £1.2 billion by the end of 2012.

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