Connaught, the housing support services group, this week proved that it had positioned itself well to take advantage of the social housing sector with a strong set of interim results.

The company, which is listed on the alternative investment market, revealed that pre-tax profit rose 33% to £5.9m in the first half of the year to 28 February.

Connaught has benefited from the government's plans to create a £12bn-a-year market in social housing, as well as continuing maintenance expenditure. Operating margins within Connaught's social housing division rose to 5.1% from 4.3% in the same period last year.

Overall group margins rose to 4.9% from 4.5%.

The second and smaller part of Connaught, compliance services, also performed well.

The division provides gas, fire and electrical testing services to the public and private sectors and has benefited from the increasing regulations.

Mark Tincknell, Connaught chief executive, was in bullish mood. He said the strong six months had paved the way for a record performance in 2006.

He said organic growth had resulted from enlarging and extending contracts with existing clients. "The prime example of this is South Somerset Homes, which started as a £1m contract in 2001 and has now developed into a £100m asset management partnership," he said.

Turnover rose 18% to £134m in the first six months and the interim dividend increased 10% to 3.3p. Connaught's order book rose 15% to £1.5bn, and the total orders received in the first half of the financial year were £335m.

Notable wins included a £120m, seven-year Decent Homes contract for Leeds council, and a £38m contract for Stafford council, over a period of five years.

Shares in the company rose 2%, or 19p, to 944p when the results were announced on Monday.