Civil engineering group Balfour Beatty today said £1.2 billion of contracts from London Underground had helped it boost annual pre-tax profits by 10% to £130 million.

Balfour said its order book grew by 14% to £5.8 billion in 2003, mainly due to two Public Private Partnership (PPP) deals to upgrade the Tube.

The firm has a 20% share in the Metronet consortium that has two lucrative 30-year concessions with London Underground.

The contracts were among six PPP deals that Balfour sealed during the year, including work to upgrade roads, schools and hospitals.

The group was forced to make provision for the loss of three rail maintenance contracts, due to Network Rail's decision to take maintenance in-house, which Balfour described as "disappointing".

However, it said exceptional profits from disposals led to a net exceptional annual profit of £5 million.

The group said it had already secured "a very significant proportion" of expected current year UK work.

Chief executive Mike Welton said: "Overall, we expect to see further growth in 2004 and to make progress accordingly."

Wednesday March 10, 2004