Stuart Doughty, the company doctor brought in four years ago to engineer a recovery at Costain, yesterday said his job was "almost complete".

The civil engineering, construction and infrastructure gorup was now in a strong position to reap the benefit of its £1.6 billion order book over the next few years.

Mr Doughty, who will step down as chief executive on September 12, joined Costain in July 2001 when the company's shares were trading at about 91/2p each.

Following the publication of an upbeat set of interim figures yesterday, they were trading at one stage at 493/4p.

Costain, which is undertaking a number of projects in the Midlands, including work at Good Hope Hospital, Sutton Coldfield, reported a 39 per cent rise in pre-tax profits to £7.5 million for the six months to 30 June.

Sales for the period rose by 2.3 per cent to £345.4 million and operating profit was 66 per cent ahead at £7.8 million.

Costain has not paid a dividend since 1991 and is again omitting an interim payout following shareholder approval of a financial restructuring exercise involving the reduction of the share capital and the cancellation of the share premium account.

Mr Doughty's strategy to re-focus operations and reduce risk has seen Costain win some significant contracts, particulary in the water industry where it has picked up a raft of infrastructure deals worth up to £1.7 billion.

"We've worked bloody hard to secure some of the UK's biggest civil engineering contracts, especially in the water industry and in highways infrastructure," Mr Doughty said.

These include a £700 million five-year contract from Southern Water - the largest deal in the sector to date - and has secured about £190 million of major road works.

The group is also working on some large capital projects at Stratford, Kings Cross and St Pancras in London and is looking forward to participating in the bidding for the various construction projects associated with the London 2012 Olympics.

"We've got a lot of experience across a whole range of projects including road building, tunnelling and rail engineering.

"We anticipate a considerable volume of work from the Olympics - maybe adding as much as £100 million a year to turnover in the run-up to the Games," said Mr Doughty.

The strength of the forward order book is such that the group has already booked £700 million of turnover for 2006 and £340 million for 2007.

"Around 70 per cent of the order book is in heavy civil engineering and asset management where there is very little risk.

"The visibility of the order book has also improved and this is beginning to be reflected in the quality of the earnings," Mr Doughty added.

Some analysts are now looking for a resumption of dividend payments in 2006.

Based on earnings projections of 5.4p per share, they say there should be a payout of 10p a share for that year. It would be the first dividend payout for 14 years.

"Today's half-time numbers were positive and have set the foundations for an excellent performance in the future," said Stephen Rawlinson of stockbrokers Arbuthnot Securities.

The next phase of the group's growth will be overeen by Andrew Wyllie who will take over from Mr Doughty.

He joins from Taylor Woodrow where he was managing director of the group's construction business.