Building and infrastructure group Morgan Sindall says profits from its affordable housing arm grew by more than half after it posted record annual results.
Shares rose sharply after the London-based group said pre-tax profits rose by 34 per cent to £27.9 million in the year to December 31, with turnover up seven per cent to £1.22 billion.
Earnings per share rose by 16 per cent to 50.70p, with total dividends of 18.50p, a 12 per cent increase from 16.50p in 2003.
Morgan Sindall said it had started 2005 with a forward order book of £2.26 billion and forecast another year of strong growth.
This included a 51 per cent profits increase at Lovell, which specialises in housing for low-income families, amid continued demand from local authorities and housing associations.
Morgan said the division's order book now stood at a record £1.34 billion.
The company also reported good progress across all its other businesses, particularly the Fit Out arm which designs and refurbishes offices.
The group employs around 5,000 staff across the UK with sites in Birmingham, Manchester, Glasgow, Bristol, Basingstoke and London.
Last year, it merged its six regional regional construction operations into a single business under the Bluestone brand.
Since July, the company has secured new contracts in the Midlands worth more than £15 million.
Key projects include an £800,000 refurbishment contract to provide a new regional control centre for the Highways Agency in Birmingham and three schemes in Banbury - a £216,000 construction of a new music hall at Chadlington School; a £178,000 refurbishment project for DC Leisure, and a £120,000 project to build a new ICT suite at Tudor Hall School.
More than 90 per cent of work won has been repeat or referred business.
John Homer, Bluestone regional managing director, said: "In 2004, we made significant progress in our strategy to build long-term construction relationships with key clients, undertaking a number of high quality projects for major public sector organisations.
"Our involvement in several important healthcare and education frameworks and PFI schemes has helped us to strengthen our presence in these core markets, including our involvement in the £75 million Warwickshire County Council framework under which we are carrying out a number of projects in the social services, education, property services, libraries and heritage sectors.
"Entering 2005 with a strong order book, we are confident of further business growth in the region this year." Turnover for Lovell, which has its Midlands regional office at Woodgate Business Park, Woodgate Valley, Halesowen and its head office at Marston Park, Tamworth, rose 31 per cent to £364 million.
The company's operating profit rose from £8.92 million to a record £13.45 million, while its forward order book stands at a record £1.34 billion.
"Lovell's market-leading success in delivering large-scale housing refurbishment schemes and mixed tenure development is reflected in our record financial results," said Lovell managing director Stewart Davenport.
"Continuing investment from the Government's Decent Homes and Sustainable Communities programmes leaves us strongly placed for continued growth in the Midlands where we are working on a number of high-profile regeneration and refurbishment projects."