Construction group Balfour Beatty today brushed off the economic slowdown and reported good progress on the building of the Aquatics Centre in east London for the 2012 Olympics.

The firm reported a 25% jump in first-half profits to £95 million, ahead of City expectations of £91 million, as it benefited from major public-sector contracts in the UK and around the world.

Chief executive Ian Tyler also hailed the troubled Aquatics Centre, a centrepiece of the London Games, as a “fantastic project” as the eyes of the world remained fixed on its equivalent in Beijing, the Water Cube, where Rebecca Adlington won gold for Britain and American Michael Phelps claimed his fifth this morning.

The Zaha Hadid-designed Aquatics Centre has always been an icon of the London Olympics with its big waving roof but costs have spiralled from original estimates of £75 million to £303 million.

Tyler today said Balfour was on site preparing to start construction and declared the project was “ahead of programme.

“It is a fantastic project,” he said. “It is going to be a fantastic project to build and a fantastic project for the Olympic Games in London.”

Balfour, which does around 55% to 60% of its business in the UK, 25% to 30% in the United States, and the rest around the world in growth areas such as Dubai, Hong Kong and Singapore, raised its half-year dividend from 4.6p a share to 5.1p a share after revenues leapt 28% to £4.33 billion.

In the UK, it builds and maintains schools, hospitals, rail networks and roads and is closing in on a £1.5 billion scheme to widen and maintain the M25. Much of its work in America is for the Navy, Army and Air Force.

Tyler said: “The UK Government is showing no signs of backing off any of the programmes that are core to our business. It is committed to spending on education and we are going to see a lot of expenditure through the rail system in the next four or five years.”

He said the development of Crossrail was “a major opportunity” for the firm.

“It would be wrong to say we are not worried about the economy but our customers are investing to a much longer cycle than those in consumer-facing markets,” he said.

Balfour's order book rose 14% to £12.1 billion and Tyler said he was confident of further growth this year and next.

The firm today also secured a major civil engineering contract and two building services deals worth about £240 million in total with its joint venture partners in Dubai.

Shares in Balfour rose 81/4p to 4181/2p on the back of the bumper profits and positive outlook for the year.

Landsbanki Securities said it was a “good set of interim results” and maintained its “buy” rating on the stock.