Despite facing cuts in public spending in its UK and US construction markets, Balfour Beatty has reported a growing order book and an increase in underlying pre-tax profits from continuing operations to £138 million for the first half, up from £133 million previously.

However, the group's share price fell by around 5 per cent in early trading. The company warned that reduced UK and US construction activity will impact its performance and hold back revenue growth. A shortage of specialist projects is also likely to restrain margins.

Figures compiled by construction information specialist Glenigan suggest that Balfour Beatty is holding its share of UK markets, despite growing competition from smaller rivals.

Balfour Beatty ranked first ahead of Laing O'Rourke in the year to July 2011 in a Glenigan league table that measures the success of the Top 50 contractors in winning contracts worth over £500,000 in the UK. Balfour Beatty won 238 contracts during the period, securing work worth £2,685.2 million.

Amongst other rivals in the Glenigan league table: Morgan Sindall ranked third with 265 contracts worth £1,866.8 million in the year to July 2011; Kier ranked fourth winning 206 contracts worth £1,872.2 million and Galliford Try fifth with 85 contracts worth £1 220.4 million.

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Balfour Beatty reported a 6 per cent rise in its order book to £15.5 billion for the half to July 1. Chief executive Ian Tyler said: "Looking ahead, we will continue to manage the business on the basis that market conditions will remain tough." But he added: "We expect recovery in our markets in the medium term and we have positioned ourselves to take advantage of the growing demand longer-term for infrastructure across the globe." Group turnover rose 1 per cent to £5,222 million.

According to Glenigan contract data, Balfour Beatty's tendering success rate was similar to levels seen during the whole of 2010. However, Glenigan figures suggest life has got tougher for the group since 2009 when its success rate - measured by the value of its contracts - was higher. In the month of July 2011 alone, Balfour Beatty won 17 significant contracts worth a total of £114.5 million. This compares with 22 contracts worth £248.3 million in July 2010.

Meanwhile, Balfour Beatty continues to top Glenigan's league table of contractors in the roads sector. In the year to June 2011, the group won 41 roads-related contracts worth £1,340.5 million. The nearest rival, Ferrovial, won contracts worth £235 million.

In the first half, the group's overall construction revenues were little changed at £3.27 billion and although profit from construction operations fell by 15 per cent to £67 million, the order book rose by 7 per cent to £9.1 billion. The UK performance was helped by cost-cutting although the group's construction margin fell to 2.0 per cent from 2.4 per cent previously.

The firm has recently delivered the A3 Hindhead dual carriageway and the Olympics Aquatics Centre and is on programme to complete Blackfriars Bridge Station and the widening of the M25. Meanwhile, it says the commercial markets in London are showing signs of recovery, although it is too early to call it a trend.

(CD)