THE boom in the housing market in the South has seen a North-East-based company announce a record increase in profits.

Grainger Trust plc released figures showing pre-tax profits up 81 per cent from £4.7m in 1999 to £8.5m for the six months ending March 31.

Andrew Cunningham, finance director for the Newcastle firm, said their success has been down to the combination of two factors.

"Although we are a Newcastle company we have 60 per cent of our business in the South-East," he said.

"The increase in house prices there has had a positive effect on our business, and the sale of land to house builders in this financial year has seen us produce these results.

"Overall the figures are very good for our shareholders, and for everyone connected with the business."

The company, founded in 1912 and located on Grainger Street in the city centre, does own property and land in the region, but now most of its business is concentrated in the South.

Managing director Stephen Dickinson acknowledged that the doubling of pre-tax profits was a major boost.

"This excellent performance is due to increased contributions from the tenanted residential and land development activities," he said.

"Our net asset value, which rose from £7.08 to £9.70, has increased substantially as a result of the improvement in house prices which in turn has strengthened the demand for residential land."

The company announced a dividend of 2.3p per share, an increase of 15 per cent.