Pre-tax profit for 2005 grew to £134m after construction division recovered strongly in second half of 2005.

Giant construction group Balfour Beatty published end-year results today that showed a 25% hike in pre-tax profits.

The firm, which pulled out of the race to buy contractor Mowlem, also grew turnover from £4.24bn to £4.37bn, for the year ending 31 December 2005.

Pre-tax profit grew from £120m to £134m, with an extra £7m added to the profits due to exceptional items.

The firm said: "There was another good performance from Mansell and satisfactory progress in other operating companies, including Balfour Beatty Construction, whose profits recovered strongly in the second half of the year following some contract losses in the first half largely as a result of exceptional raw material cost inflation between contract and project execution."

The firm said most of its current projects were doing well, apart from continued difficulties on a major signalling contract in the US where "further losses have been sustained".

Chief executive Ian Tyler said: "We have record order books and a number of preferred bidder positions. Our major markets are healthy and continue to offer substantial opportunity. We are clear about our priorities for the continued development of the business in both the medium and long term and have the proven management capability to deliver. We are confident that we can continue to make progress in 2006."