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McAlpine's contracting division made an operating profit of £3.1m in the year to 30 October 2001, compared with a loss of £427,000 in 2000. The firm's directors described the turnaround as "satisfactory".

The division's turnover dropped from £577m in 2000 to £494m last year, according to figures lodged earlier this month with Companies House by McAlpine's parent, Newarthill.

McAlpine is the UK's largest privately owned contractor and has recently won large projects such as the £250m Spitalfields Market Development and the £120m Arsenal football stadium. A McAlpine/Balfour Beatty joint venture has also been tipped to win a £90m deal to redevelop London Bridge station for Railtrack.

The improved contracting performance helped London-based Newarthill to post a pre-tax profit of £11.97m last year, against £9.34m in 2000. Group turnover increased £102m to £757m over the period.

The accounts show that Newarthill's wind energy business, which operates mainly in the USA and recently completed a large project in Texas, was the group's second largest arm with turnover of £196m but was the most profitable, with an operating profit of £9.5m in 2001. The division, called Renewable Energy Systems, made an operating profit of £1.4m in 2000.

The operating profit of Newarthill's property division jumped from £393,000 in 2000 to £1.3m last year but still has some way to go to return to the £5.7m made in 1999. Operating profit for the group's PFI investments fell from £2.6m to £1.8m. The directors' statement said: "This was due to start-up losses on the Dudley Hospital investment being greater than the increase in the profits of other PFI investments."

Newarthill also has a helicopter business, which made £1.72m last year on turnover of £36.12m.

The accounts revealed that Newarthill had spent £11.1m buying back 1.71 million shares to "enhance the value to non-selling ordinary shareholders of their investment in the company".