One analyst said: "It has a glacial pace of development. Mowlem needs to increase the metabolic rate to above zero."
Another said: "Mowlem has been slow about getting into support services and some areas it has gone into have gone wrong. The group is in a good position but it is not exploiting it."
Announcing the results, chief executive John Gains denied that Mowlem was vulnerable, pointing to its growing interest in support services and non-traditional contracts as spurs for future success.
Gains said the construction arm would see margins of 3% by 2004, while support services margins would reach 5%. He said: "Customers and clients are beginning to realise that there are other ways of judging contracts than just on entry costs. We are confident margins can improve, we can reduce volatility and have a more consistent earnings profile."
Mowlem's pre-tax profit rose 45% to £24.5m in the year to 31 December 2000. Turnover increased from £1.34bn to £1.39bn. The group also reported a record order book of £1.8bn.
Mowlem has a glacial pace of development. It needs to increase the metabolic rate to above zero
Mowlem has yet to decide how to spend the £40m remaining from last year's sale of SGB Group. Gains confirmed that the group would consider an acquisition in support services but declined to set a deadline for using the war chest.
Finance director Gerry Brown added: "If we are sitting on a cash pile in a couple of years' time and we still haven't done anything, then we will be under pressure, but that's not on the table."
Mowlem admitted that Skillbase, the division set up to carry out domestic repair and maintenance for insurance firms, was still losing money six months after it was restructured following losses of £1.8m. Gains said he expected to see the firm make a profit this year.
Gains also pledged his commitment to Mowlem's involvement in the Linc consortium bidding for the proposed public–private redevelopment of London Underground, despite admitting frustration with the continued squabbling over the deal.