The firm reported its group order book to be slightly ahead of the half-year at £8.8bn and most parts of the construction business would meet targeted margins.

Cost inflation and raised interest rates had created some scheme viability challenges at the Muse urban regeneration arm, while operating margins at the housing property services business continued to be impacted by general cost and labour inflation.

In a trading update, chief executive John Morgan said that the key construction and infrastructure operations remained on tack to deliver operating margins of 2.5-3% and 3.5-4% respectively. While the fit-out arm was on track to deliver a ‘very strong’ full-year performance.

Morgan said: “In recent months, increased general market uncertainty together with continued inflationary headwinds have provided for a more challenging economic backdrop.

“Despite this, trading across the group has been robust and with our high-quality secured workload giving good forward visibility, we’re on track to deliver a full-year performance in line with our expectations.”

He added that the cost of building safety works expected to impact the Partnership Housing and Urban Regeneration operations remained in the estimated range of £40-£50m.

Average net cash in the year remained strong at £260m.