Arup has reported a 4.9% drop in pre-tax profit as a result of narrowing margins

The firm posted a profit of £77m for the year to 31 March, down from £81m in 2008. Turnover rose by 22.5% to £889m, up from £726m the previous year, which meant its profit margin fell from 11% to 8.6%.

Margins have come under pressure across the industry as the trading environment becomes more competitive. The firm warned that conditions would remain tough and next year’s financial performance was “likely to be affected”.

David Whittleton, chief operating officer, said: “With the global impact of the recession, and the rapid slowdown in many areas of construction and related design activities, we have been careful to manage the level of our staff resources to match our current and expected future workload. Financial performance for 2009/10 is, however, likely to be affected.”

Philip Dilley, Arup’s chairman, added: “Conditions will continue to be challenging in many of our markets for some time, but our multidisciplinary capability and global spread enables us to continue to win and deliver high-quality projects around the world.”