The Carillion board this week said that it could not guarantee it would not make further write-downs on Mowlem, on top of the £120m it has already wiped off the balance sheet.

Carillion is now undertaking a thorough review of the Mowlem business, after it completed the £313m takeover two weeks ago, and the board is expecting to be clearer at the half-year reporting stage in September.

Finance director Chris Girling said: "Before Christmas we did due diligence but we weren't tracking every contract and every site so we don't know yet."

Carillion has already written off £45m on Mowlem contracts, and £75m on assets. Girling added: "It could be more, it could be less."

Girling also said that Carillion would not be chasing any more "lump-sum, big civil-engineering projects", which was a problematic part of Mowlem's business.

"Those contracts are notoriously difficult. We won't be doing any more tunnels in Dublin, that's for sure," he said.

Carillion will, however, carry out the work on jobs where a contract has already been signed.

Carillion now has the task of identifying which Mowlem businesses it wants to sell, which are thought likely to include its Barclay Mowlem, its Australian business, and Mowlem Pall Mall, a cleaning firm. "Everything is for sale at the right price," said Girling.

Carillion revealed in its results presentation on Wednesday that officials from the Office of Fair Trading had visited two Mowlem offices. "We don't know what it's all about," said Girling. "We are waiting for the OFT to report back; it was a surprise to us."

In the year to 31 December 2005, Carillion's pre-tax profit fell 22% to £52m because of one-off items. In 2004 it benefited from an exceptionally low tax charge and £7.2m from the transfer of rail maintenance to Network Rail.

Underlying pre-tax profit in 2005 rose 15% to £55.5m. Turnover rose 15% to £2.28bn, which will rise to about £4bn this year, the first year that its results will incorporate Mowlem.

Carillion's biggest rival, Balfour Beatty, also announced its 2005 results on Wednesday. Pre-tax profit rose 25% to £134m on a £4.9bn turnover, up 16%.

Chief executive Ian Tyler said the biggest drivers of growth were that its US civil engineering business returned to profit, as well as good performances in social housing and road maintenance.

Carillion results at a glance

Turnover £2.28bn (+15%)
Pre-tax profit £51.9m (-22%)
Underlying pre-tax profit £55.5m (+15%)
Underlying earnings per share
20.4p (+10%)
Total dividend 8p a share (+7%)
Order book £7bn (+40%)
PFI assets (including Mowlem) £195m

Balfour Beatty results at a glance

Turnover £4.93bn (+16%)
Pre-tax profit £134m (+25%)
Earnings per share 24.1p (+9%)
Total dividend 8.1p (+23%)
Order book £7.6bn (+12%)
PFI assets £289m