Chairman Sir Fraser predicts construction mark-ups will beat 5% next year, but plans to drop “construction” from group’s name.

Morrison Construction plans to raise construction margins to an industry-beating 5% next year, after achieving 4.3% returns in the 12 months to 31 March.

Chairman and chief executive Sir Fraser Morrison made the commitment while announcing strong year-end results on Tuesday.

Turnover across the group’s three divisions – construction, asset management and development partnerships – grew 19% to £510m. Pre-tax profit rose 11% to £26.8m, giving an average group margin of 5.3%. The turnover of the construction division was £247m with pre-tax profit of £10.7m.

Sir Fraser said: “We’re delighted to keep an average margin above 5% on a turnover of over half a billion. Over time, we hope that the three divisions’ contribution to profit will achieve a more balanced position.”

Despite a strong showing from construction, the C-word itself will be dropped from the group’s name at the annual meeting in July, when it will become Morrison plc. Sir Fraser added: “Construction no longer reflects the full profile of what we do. Our strategy is to provide a comprehensive service from development to asset management, and that will drive where we go as a business.” The development partnerships division, which this week signed a £140m joint venture with Thistle Hotels to build 10 hotels in the next five years, produced the best margins with a pre-tax profit of £11.8m on a turnover of £134m.

Morrison is moving into long-term alliances with clients, including a five-year outsourcing deal with Yorkshire Water.

Sir Fraser is hoping that a third of future business will come from strategic outsourcing contracts. Asset management, which includes facilities management contracts won from local authorities such as Norwich City Council, achieved turnover of £129m and pre-tax profit of £5.5m.

Sir Fraser predicted further joint ventures and turnover growth at a similar rate as last year, with the slim possibility of an acquisition. “We’ve been able to generate an increase in growth without resorting to high-premium acquisitions,” he said.