The chairman of the UK’s biggest private contractor said there was still a long road ahead before recovery in engineering and construction takes hold.

He unveiled pre-profits halved at £25.9m in the year ending 31 March, down from £50m last time.

By comparison total managed revenue dipped by just 6% to £4bn, still 20% below the £5bn peak in 2009.

O’Rourke said: “Looking forward, the engineering and construction sector will continue to face into an economic storm for the foreseeable future.

“While these and a number of other uncertainties remain in the immediate term, our medium-term view of demand growth remains positive, and we will recommence revenue growth from 2012/13.”

He added: “In this environment we will focus on protecting cash reserves and maintaining earnings quality at the individual project level.

“We now have a safer, leaner and smarter business that is in good competitive shape,” said O’Rourke.

Despite the fall in revenue, the Laing O’Rourke’s gross margin edged up 10.2% – its best ever performance.

Tight cost management and efficiencies in project delivery helped to hold up  gross margin throughout the recession.

Over the year Laing O’Rourke’s staff head count fell 23%  to 15,027, due to 5,000 job cuts at the European hub business, mainly in the Middle East.

Staff number grew by more than 500 in Australia. Over the next few years the group predicts the contractor will grow strongly in Canada and Australia.

O’Rourke also said he had set up a R&D think-tank group at the firm, which will steer problem solving, help win major projects and offer external consultancy.

The new Engineering Excellence Group, or EnEx.G as it is known, will work centrally to lead the Laing O’Rourke’s innovation agenda.

Staff within the new group will help the design and delivery businesses, benchmarking design, manufacturing and construction processes.

It is also being tasked troubleshooting operational issues and providing thought-leadership to assist in winning major new projects.

Laing O’Rourke also will offer its service as a consultancy to clients, like central Government and supply chain partners.