Support services and property management group Mitie yesterday said business is doing well as private firms and the Government outsource work to save money.

The firm, which cleans the Tower of London and provides security for the Thames Barrier, reported a 12.5 per cent rise in first-half profits to £42.3 million.

The Emersons Green company is growing its public sector expertise in anticipation of a public spending clampdown by whichever party wins next year's General Election.

Revenues were up 5.3 per cent in the six months to the end of September, to £801.1 million, and the dividend was up from 3.3p a share to 3.7p.

Chief executive Ruby McGregor-Smith, pictured, said: "All our clients across the public and private sectors are looking to increase outsourcing to save money. Everyone has identified that the deficit (in the public sector) is too high and has to come down."

Mitie is expecting "significant" opportunities in health, justice, education and social housing.

But Ms McGregor-Smith said: "Our markets are more stable than 12 months ago and we see no signs of further deterioration, although we have not seen any consistent signs of economic recovery as yet."

Mitie said its pipeline of potential work was at ''unprecedented" levels.

The group has recently landed facilities management deals for services such as cleaning, security and catering in the public sector for clients including the Welsh Assembly.

The firm will look after the assembly's main building in Cardiff.

But around two-thirds of the group's 54,000 employees are currently working on private sector contracts for the likes of the Co-operative Group, Rolls-Royce and HSBC.