Interserve support services and building company, overcame tougher trading conditions in the UK and Middle East to deliver a 19 per cent rise in interim pre-tax profits.
However, its pensions deficit of £250m has prompted the company to close its final salary pension scheme to a further 900 staff.
Adrian Ringrose, chief executive, said the move to scrap further accrual came as talks continued with pension fund trustees over how best to make up the pensions shortfall.
Interserve’s final salary scheme was closed to new entrants seven years ago. The company, which employs 26,000 staff in the UK and 50,000 worldwide, will continue to honour defined benefit deals for a small proportion of staff transferred from the UK’s public sector whose defined benefit pensions continue to be partly underwritten by the government.
Revenue edged up from £914m to £951m, with profits rising from £33.7m to £40m in the six months to June 30. The interim dividend is lifted from 5.3p to 5.5p, payable from earnings per share of 24.2p (17.7p).
The company, which generates about half of its profits in the Middle East, continued to trade well in the region in spite of difficulties facing developments in Dubai.
Mr Ringrose said: “We have good long term parterns in the region helping us to win work and get paid.
“We are not seen as a British company - people see us as a local company with a British shareholder.”
In the UK market, turn- over and margins had been affected by the recession. But demand in the public and privatised sectors remained resilient.
Interserve, which has won contracts ranging from hospital upgrades and new school building projects, also hoped to benefit from government plans to build more prisons.
The shares, down 38 per cent over the year, rose 10.3p to 237.1p.
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