Half time pre-tax profits have climbed more than 22 per cent for BSS Group, the heating and plumbing firm which recently opened a new £1.4 million regional distribution facility in Birmingham.
BSS yesterday said that profits for the six months to September 30 rose 22.1 per cent, up from £ 14 million to £17.1 million, while sales rose 15.2 per cent, from £ 359 . 4 million to £413.9 million. The interim dividend payment rises 20 per cent, from 1.1875p to 1.425p per share.
Chairman Peter Warry told shareholders: "During the first six months of this financial year we have experienced strong sales growth.
"Sales in the first six weeks of the second half have remained in line with our expectations, showing like for like growth of ten per cent."
He added: "The Government's continued commitment to its spending programme on health, education and social housing clearly underpins our growth.
"Accordingly, the board remains confident of the group's future prospects and committed to enhancing shareholder value."
Analysts at brokerage Bridgewell said: " BSS interims showed figures ahead of our expectations. We believe against this background that upgrades to forecasts seem likely."
BSS said it had opened its new regional distribution centre in Birmingham below budget and planned to add 20 branches per year for the foreseeable future to its existing chain of 213.
"The areas we trade in are seeing an increase in government social spending, but they are behind schedule, so we have more income to come than we expected," chief operating officer Gavin Slark said.
Shares in BSS were up 0.4 per cent at 302 pence following the announcement, valuing the group at around £370 million.
"Our confidence in the future is demonstrated by the 20 percent increase in the dividend, and we expect a double- digit increase in dividend over the next three years," Mr Slark said.
BSS said chief executive Peter Wood will retire at the end of December, after four and a half years in the role. He will be replaced by Mr Slark. Shares closed down 23/4p at 298p.