Markets impressed by steady performing Interserve

 
Oliver Gill
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GERMANY-ECONOMY-BUILDING
Interserve's construction division performed well in the Middle East (Source: Getty)

Shares in support services provider Interserve leapt nearly 17 per cent today after unveiling resilient half-year results.

Revenues and operating profit nudged two per cent higher compared to 2015 with interim dividends increasing by a similar amount.

"Trading in the first half of the year, across the vast majority of our divisions and our regions, has been good, in markets that offer both opportunities and challenges. We delivered a strong cash performance and grew revenue and Headline operating profit," said chief executive Adrian Ringrose.

Work pipeline remained identical to 2015 at £7.6bn and £1.9bn of work was won during the first six months.

"We are taking action to exit the Energy from Waste sector. Our assessment of the aggregate impact of exiting this sector is in line with the £70 million exceptional charge we announced in May," said Ringrose.

The business unit comprised of six contracts through to 2017 that brought in £430m of revenues. The losses incurred mean no further charges are expected from these contracts.

Operating cash flow jumped from £20m to £128m, underpinning the reduction in debt balances to £276m – below the guidance of £300m-£320m.

"Despite the increased political and macro-economic uncertainty following the UK's EU referendum, our outlook for the current year remains unchanged. This, together with our significantly improved cash flow and healthy future workload, underpins the Board's confidence in our prospects and a further increase in the interim dividend," said Ringrose.

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