Miller Group has provided further evidence of the recovery in housing markets by posting a 51% increase in underlying first half profits to £14.2 million, from £9.4m in the same period last year.

However the profits earned in the six months to June remain well adrift of the £56.4m surplus Miller achieved on the same measure in the first half of 2006 amid the boom that ended with the Credit Crunch.

The company also noted its construction arm is focusing on profitable public sector work to help cope with tough market conditions.

Edinburgh-based Miller Group became the latest company to highlight the improvement in housebuilders' fortunes in a first-half results announcement in which it said official moves to encourage banks to lend, through schemes like Funding for Lending, have had a noticeable effect on activity.

"We have seen a marked improvement in the housing market during the first six months assisted by the Funding for Lending scheme with further stimulus provided by the Help to Buy scheme, as well as an improvement in the UK mortgage market," said chief executive Keith Miller.

He added: "92% of target housing sales volumes for the year are already secured with a positive movement in the average selling price over last year."

Miller is selling homes in Scotland under the Mi New Home scheme which allows people to obtain up to 95% mortgages.

Housebuilding giant Barratt announced a 74% annual increase in pre-tax profits, to £192m, on Tuesday and said it has started to notice the benefit of schemes like Help to Buy.

Asked about some economists' concerns that Government efforts to encourage people to buy houses could lead to an unsustainable increase in prices, Mr Miller said: "The Help to Buy initiative has been a huge positive for the industry, and since its launch we have seen a significant increase in sales rates."

He said the Government could ensure equilibrium in the market by continuing to improve the supply of land with planning permission.

Miller Group aims to grow home sales in the next three years to above 2000 units annually. It completed 819 homes in the first half compared to 820 in the same period last year.

Miller expects to increase profit margins on homes as it builds an increasing share on land bought in recent years at lower prices than it had to pay during the boom.

The company plans an increased weighting towards the Midlands and South of England, but expects Scotland will continue to account for 20% of housing sales.

Miller Group noted strong demand for offices in Aberdeen had helped the development business achieve an "excellent performance" in the area.

Mr Miller said the company has no plans to change its headquarters.

The company said its construction arm made a £2.4m loss in an "extremely competitive" contracting market. Construction firms have reported that building activity in the private sector remains muted.

Miller Group noted: "The order book has increased by 18% to £1.8 billion and is weighted towards frameworks and PPP (Public Private Partnership) projects where there are higher barriers to entry and more secure margins."

The first-half results reflect the financial benefits arising from a major refinancing completed in 2011. Lenders including Royal Bank of Scotland, Bank of Scotland and National Australia Bank swappwed debt for equity. The GSO Capital Partners arm of the Blackstone private equity business provided £160m in return for a 55% stake in Miller Group.

Miller Group increased pre-tax profits to £4m in the first half, from £400,000 last time.

The company's interest bill fell to £8.7m from £12.2m last time.

Asked if shareholders have any plans to float the business, Mr Miller said: "GSO is a supportive shareholder and given the progress the Group has made we now have a strong base from which to plan for the future development of the business."

Group revenues increased to £362m from £284m.