Construction company Galliford Try has never been in a stronger financial position, a senior executive has revealed.

Finance director Frank Nelson spoke out yesterday as the business announced full year pretax profits up 16 per cent as construction margins and sales increased.

The construction company said pretax profit in the year to June rose to #26.3 million from #22.7 million a year earlier, as sales increased to #718 million from #687 million.

Construction margins rose to 1.5 per cent, putting it on course for a two per cent margin by the end of next year.

Mr Nelson said the company employed around 700 people at Wolvey near Coventry.

He said Galliford Try had had a number of landmark projects in the region.

The company is working on a #20 million scheme to build Caulden Castle School in Coventry, is creating a Cold War aviation museum at RAF Cosworth and is developing the highly controversial and much criticised community arts building, The Public, in West Bromwich.

The company said it was working towards financial close on a multi-school PFI programme, for Northamptonshire County Council, which it believes will generate over #150 million of work on schools over three years.

Mr Nelson said " We have never been in a stronger financial position. I can say that without any doubt at all."

Chairman Tony Palmer said the company aims to grow organically and by selective acquisition, and he looked forward to reporting further progress.

The company added its construction division was performing well, it had a strong order book and was positioned for sustained growth in markets with good potential.

In construction, the profit margin increased again having risen steadily over the last three years, said Mr Palmer.

It now stood at 1.5 per cent, and the company was on course to meet its two per cent target by the end of 2006.

During the year, the company achieved financial close on four PPP investment schemes for #120 million of construction work.

In housebuilding, it completed 853 homes compared to 761 in 2004. The average selling price decreased from #224,000 to #208,000.

Galliford Try increased the final dividend to 1.5p per share, bringing the total dividend for the year to 2.1p from 1.7p.