HBG's UK arm has given itself three years to increase its margins by half.
Chief executive Brian May said he was focusing on increasing HBG's return from 2% to 3%, rather than increasing turnover.

He said: "I would not expect a vast turnover change for the firm over the coming years – we are quite comfortable with our size and will not panic if it goes down. What I am looking at is the bottom line. There are a lot of people out there who seem more interested in volume than profits, which is a mystery to me."

The task facing HBG's British management has been complicated by uncertainty over the ownership of its Dutch parent. This was sold to Spanish contractor Dragados earlier this year, and is currently the subject of a bid by Dutch rival BAM.

However, results to 31 December 2001 show that turnover increased £79m to £706.3m and pre-tax profit was up by 50% to £15.1m. May said he expected a slight reduction in sales in 2002.

May added that he was unsure how workload would change in the short-to-medium term. He said: "The slowdown in the commercial sector has been offset by the explosion in public-sector spending, but I'm not sure that will be sustainable. Health and education are on the agenda, but in four years it may be tax cuts again."

The company is hoping to achieve its higher margins by encouraging its divisions, which include construction, facilities management and design, to work more closely together. May said the group was upgrading its CAD and 3D modelling facilities at its 70-strong design division.

"We want the divisions to learn from each other. We are particularly doing this on the M&E engineering side, where contracts are separated into smaller components, so you understand better how projects fit together."

He said he was also looking at improving knowledge transfer between different divisions and regions through an intranet system. May said: "It's not working as effectively as it would be, but it will get better."

May played down the repercussions of a sale to BAM. He said: "We are performing well. I don't see too many issues for us arising from the BAM deal."