The UK construction and engineering group Balfour Beatty has reported better than expected interim profits.

Pre-tax profits for the first six months of the year rose 17% to �41m, against �35m for the same period last year.

"We remain confident that we will deliver results for 2001 which will show significant improvement over the last year" the company said in a statement.

Balfour Beatty also said its order book now stood at a record �3.9bn.

The group's building sector recorded a 50% rise in profits, and the rail engineering unit enjoyed a 17% increase.

Future revenue

Balfour Beatty is one of several construction firms who stand to benefit from the UK government's plan to build new public building projects such as schools and hospitals through the public-private partnership (PPP).

Last week Credit Lyonnais said the company was one of the firms best placed to take advantage of PPP, and the contracts help provide a regular revenue stream.

Balfour Beatty is already part of a consortium chosen as the preferred bidder to upgrade and maintain several lines on the London underground.

"We have established positions in a number of markets where future growth is predicted. These are, most notably, transportation in the USA, the worldwide rail market and the UK infrastructure market, including, particularly, that segment which is wholly or partly privately financed," the company said in its statement.

Hatfield

Balfour Beatty was one of the companies responsible for maintaining the track at Hatfield and was criticised in the report into the crash there.

Following the Hatfield disaster the company lost the contract to maintain the East Coast main line.