The contractor is confident its “policy to potholes” offering for local authorities will continue to see the business grow as public bodies look to outsource work.

The firm said: “The Comprehensive Spending Review has resulted in an increased focus on efficiency and customer service, but we remain confident that May Gurney’s activities will remain in demand as the public continues to call for the preservation of core front-line services.”

Results for the year to March 31 2011 show pre-tax profits up 13% to £24.3m on turnover up 18% to £571.4m as the business saw margins drop slightly from 4.6% last time to 4.4%.

May Gurney currently has an order book of £1.4bn and started 15 new contracts during the year.

The firm also bought Scottish infrastructure maintenance specialist Turriff in January and said it has “acted swiftly to scale-back our non-core operations” including the closure of its piling business which cost £1.9m.

May Gurney earns two thirds of its revenue from public sector services with  highways maintenance a major component.

The firm believes maintenance spending will drop by at least 10% during the coming year.

It said: “Although expenditure on roads in general has come under pressure due to the public sector spending squeeze, this has generally impacted larger capital projects.

“Expenditure growth on more safety-critical routine maintenance (May Gurney’s target market) is less affected. In addition, the recent budget announcement reflected the Government’s recognition of the importance of extra investment on routine maintenance of the road network.”

Chief executive Philip Fellowes-Prynne is confident the firm’s long-term strategy will lead to future growth.

He said: “Our strong financial position is the result of our proven strategy of focusing on developing long-term relationships with our clients for the delivery of essential front-line maintenance and enhancement services, a market which is worth £22 billion per annum and reaches 24 million people across the UK.

“With our consistent operational performance, strong balance sheet and the underlying trends within our chosen markets, we are confident in the Group’s continued future success.”