Good returns from PFI investments help contractor to a pre-tax profit of £12m for the six months to 30 June.
Alfred McAlpine this week revealed that its PFI investments are performing so well, it will not have to pump as much money into them as originally thought.

The firm has so far invested £14.4m in six PFI projects and had promised to invest another £10.1m. However, executive chairman Oliver Whitehead said the group would not have to find the full £10.1m because higher than expected returns would be funnelled back.

Whitehead said: "We're putting less equity into the projects than we had planned for and that will continue. The schemes are doing better than expected."

The group has investments in three road projects, two hospitals and a school. Its pre-tax profit on the six projects for the six months to 30 June was £1.6m, up from £1m in the same period last year.

Whitehead added that although the PFI investments were profitable, it would not invest in any more unless the returns were maintained.

"We still need to make reasonable returns on the construction phase and then the facilities management for the project. If we can do that, we will stick with PFI," he said. The group aims to obtain margins of 5-6% across its businesses.

We’re putting less equity into the PFI projects than we had planned for

Oliver Whitehead, executive chairman, Alfred McAlpine

Whitehead made his comments after McAlpine released its first set of full results since selling its housebuilding arm to Wimpey last year for £461m. The results also included figures for Stiell, the facilities management specialist it bought earlier this year for £86.5m.

Stiell's contribution helped the group's pre-tax profit for the six months to 30 June rise to £12m, from £9.5m last year. Turnover jumped £101m to £341m.

The group's operating profit rose from £5.6m to £10.7m. The biggest contribution to this was in the support services and investments division, in which profit rose sharply from £1.4m to £7m. This arm includes Stiell, which had a margin of 5.9% for the period.

However, operating profit in the firm's capital projects division fell £500,000 to £9m. Operating margins rose from 5.3% to 5.6%, but turnover fell to £159.6m from £178m for the same period last year.

Meanwhile, McAlpine continued its share buy-back programme. The group spent £2.06m last week buying 625,000 shares at 329.45p each.