Private finance initiative manager John Laing yesterday reported "robust" profits and a leap in the book value of its projects such as hospitals at a time when many NHS trusts are facing a cash crisis.

Laing, the one-time construction company that ditched brickies in favour of managing lucrative PFI contracts, said that profits jumped 43% to £35.8m in 2005 and the book value of its PFI contracts had risen from £65m in 2000 to £330m today.

Laing was recently named the preferred bidder for the controversial £1bn PFI scheme to rebuild two teaching hospitals in the capital, Barts and the Royal London. It already manages hospital contracts for Norfolk and Norwich, North Birmingham, Newham, Kingston and Newcastle NHS trusts. Critics say that PFI contracts are poor value for money and saddle hospitals with expensive financial commitments for decades to come. But the government argues that without PFI it could not have proceeded with the most ambitious hospital building programme that the NHS has seen.

Laing chief executive Andy Friend yesterday insisted that major PFI hospital building contracts were not being financed at the expense of day-to-day NHS services, and that private shareholders now carry the risks of cost overruns that once fell on the taxpayer. "The foundation stone of PFI is that it writes off the possibility of massive cost overruns on big projects, and transfers the risk to the private sector." He pointed to the National Physical Laboratory rebuilding contract, managed by Laing, where costs were double those anticipated. "It was absorbed by our shareholders," said Mr Friend.

But the future profit stream from the majority of PFI contracts has turned out to be highly predictable, to the point where Laing and other operators are packaging up projects and selling stakes in them to pension funds and insurers as low-risk income investments. Stakes are sold only once the hospital, prison or road is completed, but give a guaranteed cash flow from the government. A Laing spokesman said the PFI vehicles are selling on yields of up to 8%, nearly double the Bank of England base rate.

As well as hospitals, its PFI portfolio includes projects such as the Ministry of Defence building, the Severn river crossing and the M6 toll road. It also operates Chiltern Railways, which suffered after the collapse of construction work on a Tesco supermarket above the line at Gerrards Cross. Tesco has accepted liability but the companies remain locked in talks over the scale of compensation.