Infrastructure services group Carillion is expecting to deliver a “robust” financial performance in 2012, with growth in operating profit despite challenging market conditions, it has said in a pre-close update on trading in the 12 months to 31 December 2012.

It predicts revenue will be lower than in 2011, due principally to the planned re-scaling of UK construction, but the Group's total operating margin is expected to increase as the overall quality of its business continues to improve, Carillion said.

Reported profit before tax and earnings per share are expected to increase “substantially”, it said.

The company expects the value of its pipeline of potential contract opportunities to be slightly higher at the year end than the £35bn previously reported.

In construction services (excluding the Middle East), Carillion expects the planned re-scaling of its UK business to align it with the smaller UK market, announced in May 2010, to be largely complete in 2012. Carillion said it has done this by being very selective in terms of the contracts for which it bids in order to focus on large, high-quality contracts for long-term customers.

On its outlook, the company said:

“Looking forward, we expect our markets to remain challenging.  However, we have a resilient business with a strong order book and a large pipeline of contract opportunities and therefore continue to be well positioned for the future.”

Carillion will announce its preliminary full-year results for 2012 on 27 February 2013.