West Midlands-based infrastructure, construction and building products group Hill & Smith has posted a 47 per cent rise in underlying pre-tax profits.

For the six months ended June 30, it reported underlying profit before taxation - prior to reorganisation and property items - of £14.5 million, 47 per cent higher than the comparable 2006 figure of £9.9 million.

Underlying earnings per share rose by 27.4 per cent to 14.4p from 11.3p.

Sales revenues for the group in the half year were up by 19.5 per cent to £176.1million.

The group's core Infrastructure Products division increased its operating profit to £7.3 million from £5.9 million. Operating profits in the Galvanizing division were well ahead of last year's £3.4 million at £5.4 million and the Building and Construction Products arm climbed to £3.5 million from £2.6 million for the same period last year.

Chief executive Derek Muir said: "We have invested heavily in improving efficiency and innovation, enabling us to back up our promise of providing solutions.

"Our markets, especially those in the field of transport infrastructure, but also including such areas as security barriers and flood prevention, are growing strongly and we expect this to continue because of the clear and ongoing need for spending of this type."

Mr Muir cites as an example the firm's achievement in winning its largest ever order from the Highways Agency.

This contract, secured by its electronic signs subsidiary Techspan Systems, means that Hill & Smith now has an approximate one third share of a four year £185 million contract for the supply and installation of motorway and trunk road variable message signs across England. Ordering against this contract is expected to commence in 2008.

The Infrastructure Products division supplies a range of i tems including security barriers and flood defences, the demand for which has stepped up in response to recent events, as well as road safety barriers and vehicle restraint systems.

Hill & Smith's approach is to invest in core business areas, with a view to improving productivity as well as maximising value on the integration of carefully targeted acquisitions.

Executive chairman David Grove highlights the recent purchase of rival galvanising business Metnor as an illustration of the group's approach.

He said: "We bought this galvanising business because it was well equipped for our needs.

"We have fully integrated Metnor's operations and relocated our Mallatite lighting columns business to the adjoining site in Chesterfield. This has enabled us to improve efficiency and will lead to ongoing productivity gains."

The half year also saw a substantial contribution from the group's 33.3 per cent investment in Zinkinvent, which controls Vista, a galvanizing business with significant opera-tions in Benelux, France and the US.

On July 2, the group's stake in Zinkinvent rose to 68.2 per cent following a further investment by Hill & Smith. From that date, Zinkinvent's trading figures will be fully consolidated within the group's results rather than being included on the basis of being an associated company.

Profit before taxation was £14.2 million, up from £10.9 million.

Net debt stood at £46.6 million, down from £61.2 million in 2006.

The interim dividend of 3.6p is 20 per cent up on last year's figure and this year's interim payment is covered four times by underlying earnings per share.