The UK construction arm of the Spanish giant is looking at fresh growth markets like water and power transmission for future growth amid concerns about the UK pipeline of major transport work following the cancellation of HS2 phase 2.

Karl Goose, managing director for the UK & Ireland, revealed the plan to diversify into new geographies with a greater presence in Ireland and wider infrastructure sector work as Ferrovial’s UK construction business reported record turnover up 7% to £527m and a return to pre-tax profit in 2023 after the previous year’s £30m loss.

While the firm achieved a pre-tax profit of £5.5m, most of the profit uplift came from £7.6m interest on strong cash balances of £189m.

Ferrovial recorded an operating loss of £1.2m due to ongoing challenges on the Silvertown Tunnel project in East London, which accounted for big provisions in 2022.

Goose said: “We are greatly confident that 2024 will see us get back to industry norms in terms of profitability.

“We are continuing to deliver against our strategic objectives which form part of the overall global business plan and have made strong progress in diversifying our revenues, with early successes across some wide-ranging joint venture projects.”

He revealed that going forward the diversification started in the UK would see the firm drawn on the expertise of its Spanish parent group to target expansion into water and power.

“Ferrovial Group has strong water businesses in Spain and Portugal and part of our diversification strategy is to bring this expertise over to the UK.

“We also have  energy businesses concentrating on transmission which we can leverage in the UK.”

Growth in the near term is expected to be driven by ongoing HS2 works as part of the EKFB joint venture.

Looking forward Ferrovial is working towards work starting on its £107m. 4.5-year design and build contract for the Norwich Western Link road.

This involves constructing 6.1km of dual carriageway and seven structures, including a 670m viaduct over River Wensum.

Its other major civils project on Thames Tideway where it worked in joint venture with Laing O’Rourke, has completed.

The order book over the year slipped back from £795m to £648m.