West Midlands-based construction and building products group Hill & Smith Holdings is winning work on the back of the terrorist threat.

Temporary steel barriers it produces have been used at high-profile political gatherings such as the G8 summit at Gleneagles in Scotland.

Indeed M15 have tested the effectiveness of the barriers against suicide bomber truck bombs.

Chief executive David Grove, speaking as the company announced record profits, said the extra business was "significant".

He said mainly organic growth was behind the successful six months ended June 30 and that there was a 15.6 per cent increase in the dividend.

Pre-tax profits were 36.6 per cent ahead at £8.5 million while operating profit before financing costs rose by 32.6 per cent to £10.4 million.

Adjusted earnings per share before reorganisation and restructuring costs rose by 35.1 per cent to 9.47p from 7.01p.

The interim dividend of 2.60p compares with 2.25p last year.

Dividends have risen every year for the last six years and this year's interim payment is covered 3.6 times by earnings.

Revenue in the half year reached £143.4 million, 9.4 per cent higher than the £131 million achieved in 2004 , as the group responded to continuing strong markets for the maintenance and improvement of the transport infrastructure and in the building and construction sectors.

Mr Grove said: "The group has delivered an excellent result in the last six months and cash flows from trading continue to be strongly positive.

"It is a vindication of our strategy of concentrating our investment and product development on our core businesses, which operate in areas where we are among the leaders and where the markets are strong.

"The increased spending on public sector projects, which is likely to be sustained, will continue to create opportunities for us. In the half year, we have demonstrated strong organic growth as well as benefiting from investment, including our purchase last November of a competitor, Lionweld Kennedy."

The group's infrastructure products include its vehicle restraint systems range together with lighting poles and security fencing.

Contracts that have contributed to revenue included deals to supply wire rope safety fence to customers in Iceland, Abu Dhabi, where 78 km of fence was supplied, Sweden and Ireland.

During the period, Hill & Smith made a major investment, taking a substantial stake in a market leading galvanizing and lighting pole fabricating business Zinkinvent, with significant operations in mainland Europe and the US.

In a further strategic move, the group also bought the business and key trading assets of Techspan, a subsidiary of Jarvis, a manufacturer of electronic display signs for the road and rail transport and airport markets.

The purchase will complement the group's core activity.