Balfour Beatty appears to have shrugged off the impact of a slowing economy and construction sector after posting first-half profits up 25 per cent.

Balfour Beatty, which is building the aquatics centre for the London 2012 Olympic games, said that its strong interim performance was made possible because it works largely for the public sector or regulated industries.

The UK’s largest infrastructure contractor reported pretax profit before exceptionals of £95 million for the six months to 28 June, compared to £76 million last year

"We have customers who invest in their assets throughout the economic cycle, both in the UK and in the US," Ian Tyler, chief executive of Balfour Beatty, said. The company is also seeing strong growth in international markets, particularly in Singapore and Dubai.

Balfour's joint-venture companies in Dubai said today that they had won a handful of new contracts worth £240 million, including a £61 million Trump International Hotel and tower.

In the UK, Balfour has won contracts in recent months to widen the M25 and to rebuild Blackfriars station in the City of London, confirming that there is no shortage in the flow of public sector work.

It has also completed a string of acquisitions in the first six months of the year, including the purchase of GMH Military Housing in the US - the US's largest public-private partnership project for $350 million (£186 million).

It has also bought Barnhart, a leading Californian construction management group, and paid £45 million for Dean & Dyball, a leading regional UK contractor.

The order book for new business acquired in the period stands at £12.1 billion, up by 14 per cent since June 30, 2007 and by 6 per cent since the year end.

In May, Balfour Beatty raised £183 million from an equity placing, which helped fund its £272 million spend on acquisitions in the first half. In the past the company used cash to fund acquisitions but a recent strategic shift to increase its business base in the UK, the US and in strategic overseas markets made an equity placing suitable. Unlike many construction companies, notably housebuilders, the company is not geared and had net cash at the half year of £333 million.

Since the half year ended on June 28, Balfour has also been awarded a £300 million rail contract in Malaysia and has also reached financial close on a project to rebuild secondary schools in Islington, London.

Mr Tyler, who has recently become the owner of Blackpool and Exeter airports, said the company could be interested in buying some of BAA's smaller airports if they became available. However, it would not be interested in bidding for one of BAA's London airports if the airport authority was forced to sell assets by the Competition Commission.

"Owning something like Gatwick would make our eyes water, but we may be interested in something at the smaller end," Mr Tyler said, noting that BAA was one of its biggest customers.

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