In a trading update to the city today the firm said its full year profits for year to June 30 would be at the “upper end” of the analysts’ range of £46m to £59m.

Last year Galliford Try made a pre-tax profit of £135m.

Chief executive Peter Truscott is also confident about prospects for the next 12 months across the housing, construction and regeneration divisions.

Galliford Try revealed in May that problems on two large infrastructure jobs had forced the firm to set aside £98m.

The firm is no longer bidding for similar fixed price deals and said its “underlying portfolio of newer contracts continues to perform well.”

It added: “Construction enters the new financial year with a high quality order book of £3.5bn (2016: £3.5bn), predominantly in the public and regulated sectors, which includes 84% of projected revenue for FY 2018 (2016: 82%).”

Linden Homes it trading strongly along with an improving performance at the partnerships and regeneration business.

Truscott said: “Galliford Try made excellent operating progress in the financial year, with our reorganised management teams focused on improving operating efficiency across the Group.

“We expect to deliver a strong underlying result for FY 2017 notwithstanding the impact on the Group’s reported financial performance from the non-recurring costs in our Construction business, as previously announced.

As we enter the new financial year all three businesses have clearly defined plans to improve operating efficiency and grow revenue and margins, providing the Group with confidence in its ability to deliver a strong performance even in a period of lower growth in the wider economy.

“Overall, we remain well positioned to deliver against our medium-term target for 60% growth in profit before tax to FY 2021.”