Construction operating margins rose to 1.7% during the first half of the year from 1.1% last time.

Revenue across the division was down slightly to £662m from £694m as Morgan Sindall set stricter new contract selection criteria.

Within the division construction accounted for £342m of revenue ( down 16% on last year) and infrastructure £320m (up 12%).

Construction delivered an operating profit of £5.8m for the period and infrastructure £5.5m.

The Fit Out division enjoyed another strong start to the year with margins up to 4.4% from 4.3% generating an operating profit of £18.8m from revenue of £426m.

London accounted for an increased share of fit out work at 80%.

Chief executive John Morgan said: “I am pleased to report another strong set of results, which demonstrate the considerable operational and strategic progress made across the Group.

“Fit Out and Construction & Infrastructure have both continued to deliver margin and profit growth, which has been complemented by a good performance from Urban Regeneration.

“There remain a significant number of opportunities in regeneration and our strong balance sheet and cash position leave us well-placed to invest further in this key strategic area.

“Based upon its current trading patterns and order book visibility, the second half outlook for Fit Out is very positive and as a result of this, the Group is on track to deliver a result for the year which is slightly ahead of its previous expectations.”