Skanska shurgs off doubts over Barts and Royal London PFI to increase profit by more than £50m.

Skanska has reported profit growth of more than £50m in annual figures released this morning.

The Swedish contractor, which is waiting on a go-ahead for the Barts and Royal London PFI hospital scheme, increased pre-tax profit from £232m in 2004 to £284m in 2005.

Turnover also rose, up to £9.1bn in 2005 from £8.8bn the previous year.

Speaking at a press conference this morning, Skanska chief executive Stuart Graham said that the fiasco at Barts was not yet a major problem for the firm.

He said: "For Skanska, this is not a big negative since we are present in the educational field and there will be smaller (hospital) projects, and a few large ones."

Skanska also reported low UK construction volumes and problem contracts in the UK and US - including a disasterous gas import terminal at the Isle of Grain in Kent - saw cashflow drop from £290.2 million to £228.7 million.

Graham said: "We are turning away opportunities where the risk exceeds potential returns. We are also pushing our margins up. Our margin targets have cost us some business."