John Dodds, the chief executive of Kier, said this week that the company would focus on prison building in the second half of the year. The move is a response to the Home Office’s need to tackle overcrowding in prisons.

Speaking after Kier’s interim results were announced on Monday, Dodds said the prison building programme was gathering momentum.

His comments came as the Home Office’s eight framework contractors for prison building, including Kier, are preparing for a meeting with John Reid, the home secretary to discuss the progress of the building programme.

Dodds said: “Prisons will be a key focus for us, and we expect them to be a strong source of work because of the pressure the government is under. A meeting with John Reid is imminent, and we expect it to be a meeting of encouragement.”

He added that Kier had a “significant level” of prisons contracts in negotiation.

Kier reported a 27.5% leap in pre-tax profit to £36m in the six months to 31 December 2006, boosted by strong performances in its property and support services divisions.

A meeting with John Reid is imminent, and we expect it to be a meeting of encouragement

John Dodds, Kier

Turnover rose 11% to £1bn for the year to December 2006, up from £923m in the corresponding period in 2005. The rise comes amid a successful period for the firm, which topped Building’s contracting league table for February.

Kier’s construction businesses, Kier Regional and Kier Construction, increased combined operating profit 15.9% to £9.5m over the period. The businesses were boosted by a heavy workload in the education sector, although the international arm of Kier Construction has been hit by problems on a hotel project for Sandals in Antigua.

Kier Residential, the housebuilding arm, performed strongly despite recent interest rate rises. It made 819 sales, a 15.5% rise on the same period the previous year. However a greater proportion of social housing meant the division suffered a slight dip in margins to 14.1% from 14.8% in 2005.

Kier’s share price rose 54p when the results were announced on Monday, closing at 2,312p.