Housebuilder Wilson Connolly struck an upbeat note after making progress in its battle to halt falling profits.

The firm said the recovery programme implemented earlier this year had left it on course for a strong year.

Pre-tax profits in the six months to June 30 eased to £16.1 million from £21.1 million but Wilson said the impact of changes were now being felt.

Chairman Allan Leighton said: "The benefits of the recovery will increasingly be seen in the coming months and into the next year."

Wilson Connolly has overhauled its business after bottom-line pre-tax profits almost halved to £35.1 million last year.

The review discovered previous management had been unable to cope with pace of change within the group and there was widespread confusion and demotivation among the 2,000-strong workforce.

The company said it had successfully focused on quality rather than quantity during the first half of the year.

This resulted in 178 fewer completions at 1,887 but average selling prices rose from £138,000 to £166,000 to lift turn-more than six per cent to £340 million.

Tighter control on cash has also meant a £52 million reduction in group debt to £188 million while the group introduced a standard design approach to enable homes to be completed quicker and at a lower cost.

Other initiatives have involved the reduced use of more expensive timber frames and the introduction of a new management structure.

The company added that it now had a record forward order book of £300 million and looked on course to hit its previously-stated recovery targets for 2004, including moving operating margins above 15 per cent.