ENGINEERING and construction group Balfour Beatty yesterday reported a 17 per cent rise in profits for the past half-year, fuelled by a sharp rise in income from its rail division.

Profits at its rail engineering and services arm more than doubled to £16m in the six months to June 29.

Figures were helped by its UK maintenance business, which maintains lines in parts of East Anglia and the Wessex area on behalf of Railtrack, returning to "modest profitability".

Profits at the rail division were also boosted by the group's international growth, with acquisitions in Europe and the US expanding the business.

The rise helped offset a small fall in profits at its building division, which made profits of £21m. Its civil engineering business saw profits rise £1m to £7m.

Chief executive Mike Welton said: "We are confident in delivering further progress in 2002 and retaining our forward momentum thereafter."

Overall, pre-tax profits, after stripping out one-off items, rose 17 per cent, from £41m to £48m, ahead of analysts expectations of about £45m. Bottom-line figures revealed that profits had risen to £40m, up from £36m.

Turnover rose to £1.54bn, up from £1.27bn.