A strong performance from the housing arm of Kier helped the construction firm achieve a sharp rise in first half profits.

The contracting, services, housebuilding and property group, which was responsible for the £39 million redevelopment of Birmingham's No 1 Colmore Square, saw pretax profits almost double from £17.5 million to £32.8 million in the six months to the end of December 2004.

The result, which included a 12.3 per cent surge in sales to £816.1 million, contributed to a shift in the balance of profit generation between the first and the second halves of this financial year.

The Bedfordshire group said its sales expectation for homes sales has been secured on unit completions and the current forward order book.

Kier declared an interim dividend of 7p per share, an increase from 6p a year earlier.

Chief executive John Dodds said he had more confidence in Kier's prospects than ever before.

He said: "Our homes division, in particular, had a strong result taking advantage of an exceptional forward order book. This has contributed to a shift in the balance of profit generation between the first and the second halves of this financial year.

"There is great potential for further growth in this business and I am excited at the opportunities that are available to us within each division and across the group as a whole."

Mr Dodds said the markets in construction had remained sound throughout the period with both public sector expenditure and private sector demand contributing to his firm's order books.

He added that although there had been a cooling in the housing market between October and December, visitor levels and reservations in the post-Christmas period provided confidence that modest year on year growth in unit sales will be achieved.

Support services saw sales increase by 11.5 per cent to £108.3 million with operating profit edging forward from £1.1 million to £1.2 million.

Continued demand for its homes during the early part of the financial year provided Kier Residential with a 28.3 per cent increase in completions to 721.

This was balanced by a reduction in average selling prices from £ 184,800 to £180,500, reflecting a planned reduction in unit size and an increase in the number of affordable homes from three per cent to ten per cent of total unit sales. n Michelmersh Brick Holdings said its first full-year results since flotation on AIM were in line with expectations.

The company reported pretax profits of £1.26 million compared with £3.8 million previously, on turnover of £18.4 million, slightly below the £18.9 million of a year earlier.

The producer of handmade specification bricks and clay paviors is to pay a first dividend of 1.1p per share for the year ended November 30.

Chairman Eric Gadsden said: "Our AIM flotation was a success and we have since carried out considerable plant development, which is now complete and has put us in a strong position going forward."