The Australian group said the European contracting business was hit by the underperformance of some projects in the second half and the cost of restructuring in the UK.

More challenging market condition in the UK, Spain and Italy also saw turnover drop 20% to £511m.

In May, Mike Dyke Lend Lease’s head of UK construction left the company following a strategic review of the business by the chief executive of EMEA, Simon Hipperson.

The Birmingham Building Schools for the Future programme and UK Ministry of Defence projects were key profit contributors over the year.

The construction arm’s outlook has now improved after a spate of contract wins at Kingsgate House, for MoD projects, Cramlington Hospital and the first two Elephant & Castle projects – One The Elephant and Trafalgar Place – helped lift secured work 40% to £653m.

Overall Lend Lease’s development, investment and construction activities in Europe delivered a £58m after tax operating profit, boosted by the sales of the Greenwich Peninsula site and stronger revenues from Bluewater Park.

Across the worldwide business construction turnover edged ahead to £6bn delivering an after tax profit down a third at £193m, primarily due to the tightening of the Australian, Asian and UK construction markets.