Costain turned down £200m worth of work in the past year as the group took a more selective approach to construction contracts.
Stuart Doughty, Costain's chief executive, said the approach meant that the group focused on certain contracts and clients.

He said: "We've pulled out of some contracts at a late stage because they weren't right for us. We are now picking and choosing and being extremely disciplined."

Doughty made the comments as Costain posted a pre-tax profit of £3.8m for the six months to 30 June – down £1m on the same period last year. Finance director Miles Roberts said the decrease was the result of poorly performing contracts from previous years.

Costain is still recovering from its nightmarish experiences in the 1990s, when it suffered losses of more than £600m.

Doughty said his strategic review of the contractor's operations would be finished by the middle of next month. He added that one conclusion may be that Costain should increase its facilities management operations through an acquisition.

He said: "It's not something that we'd dismiss, but we are constrained by the balance sheet."

Support services make up 30% of the group's turnover, but Doughty said more was needed. "It has constant and reasonable margins and over longer terms. That also means less time is spent bidding for them."