Engineering group FKI said annual underlying pretax profit rose 14.2 per cent to £79 million, although it was hit by significant rises in raw material and energy costs.
The Loughborough company saw strong sales and profit growth thanks to robust demand in many of its markets coupled with operational efficiencies.
The company said that overall, it continued to face volatile commodity prices and fluctuations in exchange and interest rates.
But chief executive Paul Heiden said the group was well placed to strengthen the market position of its major businesses and improve underlying operating performance in 2006/7.
"Overall we think FKI is in good shape for the coming year," Mr Heiden said.
FKI is focusing on six core businesses and plans to dispose eventually of smaller non-core operations.
Its core interests include warehouse handling equipment maker Logistex, steel rope manufacturer Bridon, lifting equipment maker Crosby, FKI Generators and DIY hardware brands Truth and Hickory.
Mr Heiden said the group would continue its disposal and acquisition strategy and was studying possibilities at the moment, although it was "difficult to call some of them".
He added: "We would expect to be announcing some in the first half and some later on."
The group said its energy technology division was hit particularly hard by rises in the price of commodities such as copper and zinc.
Underlying operating profit in the year to March 31 lifted 14.2 per cent to £108 million while adjusted net debt fell to £304.7 million.
Turnover rose 13.8 per cent to £1.27 billion.
Meanwhile environment and rail group AEA Technology declined to rule out the sale of its rail business as it said a strong performance by its environment arm had helped it into the black at the operating level.
The group hinted that it could sell the Derby-based rail division as it moves to increase investment in its buoyant environment arm, which boosted adjusted profits to £11.1 million from £7.8 million in the year to March 31.
Overall, AEA, the privatised former commercial arm of the Atomic Energy Author-ity, made an adjusted operating profit of £4.4 million against a loss of £7.3 million last year.
The rail unit has undergone a restructuring involving 320 job losses and the replacement of its senior management in the face of nearly two years of tough market conditions.
The business, which makes technology for removing leaves from rails and monitoring the condition of track and train, has faced growing competition and delays in contracts with customers such as Network Rail.
Chief executive Andrew McCree said the restructuring had been successfully completed and the rail business was now in "far better shape".
However, Mr McCree said the pressure is now on the division to deliver "a much improved performance in a tough market" during the next year. Asked whether the company eventually plans to sell the business, Mr McCree declined to be specific, but underlined the need for investment in its environment arm.
"I would not rule out further disposals at some point. We have to make sure rail delivers what it promises this year and to step up growth in the very encouraging environment market."