OUTSOURCING specialist Capita Group shook off a number of problems to record healthy half-year profits.

The company said difficulties with its flagship London congestion charge contract had failed to take the shine off a promising trading period.

Capita, which employs 900 people in the North-East, said thousands of drivers had difficulty contacting its call centre to pay the £5 charge to drive into the capital, while others were wrongly sent £80 fines although they had paid.

Other areas of the group's services also encountered troublesome periods.

In January, the Government said it had paid the Home Office Criminal Records Bureau (CRB) £3.6m after Capita, which runs the bureau, was unable to cope with thousands of postal applications for background checks.

Executive chairman Rod Aldridge said the congestion charge call centre and CRB operations were now exceeding performance targets.

Overall, Capita saw pre-tax profits in the six months to June 30 of £63.6m, up from £51m previously.

It announced four contracts worth £293m, making a total of £1.13bn of deals won in the first seven months of 2004, against £286m in the same period a year ago.

Mr Aldridge said: "We are confident in our ability to generate long-term value for shareholders."

After one-off items and goodwill, Capita made pre-tax profits of £48.1m against £37.3m.

The majority of the value of the contract wins announced yesterday was accounted for by a 12-year contract with Salford City Council, estimated to be worth £250m.

Capita said it had also signed a £10m, two-year deal to manage services for insurer Norwich Union's national broker, Hill House Hammond.

It also extended and expanded two large public sector contracts during the period, including a £22m, six-year deal with the Driver Standards Agency and an £11m, four-and-a-half-year deal with Derby City Council.

Capita employs 410 people at Lingfield Point, in Darlington, where work is carried out for winter fuel payments, NAAFI, the Charity Commission and the Connexions Card.

Also in Darlington, 250 staff handle teachers' pensions.

A further 30 people work in Newton Aycliffe, and 250 staff provide administration and office services for the Department for Work and Pensions at 27 sites across the North-East.

Capita also has an office in Newcastle carrying out education resourcing work.

The group increased its interim dividend per share by 35 per cent to 1.75p from 1.3p last time.