The support services giant continued to be selective about contracts as it continued with plans to scale down its UK construction operations by a third by this year.

Results released today show construction turnover in this country fell 24% to £1.3bn for the year to December 31 2011 while operating margins rose to 3.1% from 1.9% and operating profit shot-up 41% to £57.9m

The firm said: “Our decision to re-scale UK construction anticipated the Government’s cuts in capital spending of some 30% in real terms over the current four-year spending plan.

“It has also helped us to improve the operating margin in this segment, as we have avoided bidding for lower margin work at a time when the UK market is becoming increasingly competitive.

“In 2012, UK market conditions are expected to remain competitive as Government cuts in capital spending continue to bite.

“We will continue to re-scale our UK business by maintaining a very selective approach to the contracts for which we bid, which will also continue to support margins.”

Carillion bought Eaga last year for £306m to boost its energy services division.

The accounts show the company spent £40m in redundancy and restructuring costs at Carillion Energy Services as part of a cost-cutting drive following the acquisition.

The firm is half way through a redundancy programme with up to 1,500 jobs to go.

Group-wide, Carillion saw turnover stay flat at £5.1bn with pre-tax profit down 15% to £142.8m.

Chairman, Philip Rogerson, said: “Carillion’s integrated UK support services and international business mix has once again enabled the Group to perform strongly, despite challenging market conditions.

“Given the wider economic outlook, we expect trading conditions to remain challenging in 2012.

“However, with a strong and resilient business, good revenue visibility and a record pipeline of contract opportunities, we continue to target growth in support services together with the doubling of our revenues in the Middle East and in Canada, in each case to around £1 billion, by 2015.

“Consequently, Carillion remains well-positioned to deliver further growth in 2012 and beyond”.