Morgan Sindall posted a 19% slump in pre-tax profits to £25.2m despite strong performance from the regeneration arm.
Urban regeneration activities generated £10m in operating profit to December 2014, up from £1m in 2013.
Revenues increased 83% from £62m in 2013 to £113m in the full year to end of 2014.
Completion of major projects at Smithfield in Manchester, KPMG’s regional headquarters in Leeds and a car park in Stockport has helped drive profits up within the regeneration business.
Return on the average £49.9m of capital employed in 2014 was 17% for the regeneration business. Average capital expenditure was down at the unit, however, from £53.5m in 2013.
Urban regeneration business increased its pipeline 13% to £2.2bn in 2014 and sees 2015 as providing further strong profits as future developments mature. The division also intends to deploy more capital over 2015 and 2016.
The success of the urban regeneration division did not offset the poor performance at Morgan Sindall’s construction division, where revenue was down 5% to £1.2bn and operating profit down 72% to only £3.5m.
Chief executive John Morgan said: “While there have been strong performances from fit-out and urban regeneration, the overall group result for the year is disappointing, having been adversely impacted by a small number of construction contracts in construction & infrastructure.
“The progress in urban regeneration is particularly pleasing as it supports our long-term regeneration strategy and provides a positive platform for further investment in regeneration, leveraging off our existing strong market positions.”
