Company chairman Philip Rogerson told Carillion’s annual general meeting the action would retain construction capability while reflecting the anticipated decline in Government spending.

In its trading statement, Carillion said it had already met this year’s turnover target and was on course to raise construction margins towards its 3% target, including more profitable work in the Middle East.

In this region, which continues to offer big opportunities, the construction services operating margin topped 6%. Carillion has recently signed £333m worth of contracts and strong demand in Abu Dhabi, Oman and Qatar presented a £4bn pipleline of work.

Rogerson said the outlook for Carillion’s growing  support services business was extremely good. He added that operating margins were expected to reach 5% this year.

“Our pipeline of contract opportunities remains strong as organisations in both the public and private sectors look to outsource non-core services in order to reduce costs,” he said.

“As we move through 2011 and into 2012 this trend will accelerate in the public sector, as following the UK General Election there will be growing pressure on both central and local government to reduce costs and improve the quality of public services.”

Carillion said it was hopeful of extending it UK PFI success to Canada. The firm is currently shortlisted or bidding for nine schemes, which would see a potential equity investment of £120m.