In a year of intensive bidding activity, the firm’s order book jumped 36% to a record £1.7bn, helped by water, rail and highways framework deals.

In the AMP5 round alone, it secured eight deals with water companies in the year to March  31.

Despite aggressive general market bidding, underlying operating margins rose to 4.5% as waste management and refurbishment work accounted for a bigger slice of the contractor’s workload.

More than 95% of May Gurney’s work is to deliver services to public sector and regulated clients where the annual total spend still tops £19bn a year.

Chief  executive Philip Fellowes-Prynn said May Gurney had conducted a thorough review of the impact of possible Government spending cuts and it expected highways spending to drop 10% this year

But he believed the shift towards greater contracting out would deliver bigger growth and outweigh work lost to capital spending cuts.

He said: “May Gurney remains well positioned in all of its core markets to provide clients with outsourced solutions which implement change, restructure services and achieve efficiency savings.

“The resilience of our target markets, coupled with our consistent operational performance, excellent visibility of earnings, focused strategy and strong balance sheet leaves us confident in the group’s future success,” he added.

Pre-tax profits rebounded from £5.2m to £18.4m after the contractor reaped benefits from the previous year’s action to streamline the group. Turnover edged up 3% to £483.1m.

Cash at year end was up a third at nearly £30m and May Gurney is looking at opportunities for small strategic acquisitions.

Fellowes-Prynn said he expected to see more councils follow Torbay’s lead to bundle up an array of services into single work packages.

Under its landmark deal with Torbay, May Gurney provides services from pothole maintenance to recycling collections and beach cleaning.