Balfour Beatty shares reached a record high today as it nudged its annual profit forecasts higher.

It came as the FTSE 250 construction firm reported strong demand for infrastructure projects on both sides of the Atlantic in the first half of the year.

A strong showing across its businesses means it now expects ‘low double-digit percentage growth’ from its operating businesses, having previously guided ‘high single-digit percentage growth’.

Shares gained 8.4 per cent to 938.5p, having gained 31.4 per cent this year.

Balfour Beatty, which works on public and private sector projects across the transport, energy and defence sectors, reported underlying profit from operations of £153million for the first half of the year, compared with £108million a year earlier.

Pre-tax profits jumped 46 per cent to £139million on net revenues of £5billion, up 10 per cent in the first half.

The firm was bolstered by increased government spending on power grid upgrades in the UK and is involved in the Hinkley Point C and Sizewell C projects. 

It is also working on the construction of Net Zero Teesside, which is aiming to be the world’s first gas-fired power station with carbon capture and storage.

Higher defence spending in the wake of the UK's Defence Investment Plan (DIP)  and an emphasis on UK suppliers ‘are all supportive for Balfour Beatty’s long-term ambitions in the space,' it said. 

‘We have continued to secure high-quality work, drive profitability and generate strong cash flow,’ said chief executive Philip Hoare, adding that the company was entering the second half with strong momentum.

An uptick in demand at the company’s US buildings division, which comprises residential, institutional and commercial buildings, also supported a £23billion order book in the six months to the end of June.

Adam Vettese, market analyst for eToro, said: ‘This is exactly the kind of de-risked, high visibility business the market wants right now. With major UK energy and defence programmes still to flow into the order book, and a healthy pipeline of US work, Balfour is well placed to keep compounding. The progressive dividend and ongoing buybacks only sweeten the deal.'

The interim dividend increased 7 per cent to 4.7p.

Vettese added: ‘Risks around project execution and political funding never fully disappear in this sector, but today’s reaction shows investors are willing to look past them.’