Laing O’Rourke has welcomed a “substantial improvement” in its UK performance despite reporting a loss of £60.6 million its latest annual results.

The engineering, construction and manufacturing group said its turnaround strategy is behind positive underlying profit and cashflow results and projected a return to profit for the current financial year.

In accounts for the year to 31st March 2017, overdue since 30th September, Laing O’Rourke recorded underlying profit of £35m in FY 2017 (2016: loss of £82m) while total revenue was up 26% in the year to £3,172.5m (2016: £2,513.2m).

Continuing losses from joint ventures of £86.2m were incurred, of which £83.2m was on phase one of the Montreal hospital project in Canada, completed in October 2017.

Laing O’Rourke increased its FY17 turnover in both the Europe and Australia Hubs.

Subsequent to year-end Laing O’Rourke has continued to dispose of certain underperforming assets and investments and has taken further steps to reduce its remaining CHUM Hospital JV exposure in Canada.

Group chief executive, Ray O’Rourke, said: “The group has responded strongly to recent challenges, not only by restructuring the UK business, but also through new processes and controls on project selection, operational delivery, digital data and risk and assurance.

“We have set a new strategic mission and are absolutely aligned with the UK government’s Industrial Strategy, which calls for construction to demonstrate productivity in-line with the aviation and automotive engineering sectors by 2025. Indeed, our aim is to outperform that timetable, with our ongoing investments in advanced manufacturing leading a step-change in safety, quality safety and efficiency.

“The market is already responding to our DfMA 70:60:30 offsite manufacturing capability in a remarkable way, and we have a series of negotiated projects now in our robust and growing global pipeline.

“It has been a difficult time for our sector, and recent events have only reinforced the importance of Laing O’Rourke’s early actions to redefine the business. Our leadership team across the group has been steadfast and their achievements remarkable.

“I take this opportunity to thank our lender group and all of our stakeholders – including clients, subcontractors and supply chain partners – as well as our supporters in government and the media, for their encouragement while we completed this significant transformation.

“We will continue to build on this momentum, backed by recent high-profile project wins, to become the recognised leader for innovation and excellence in the construction industry.”