Interserve posts a climb in earnings and predicts growth in outsourcing

SHARES in Interserve, the support services and construction group, rose 10.5 per cent yesterday after the group posted higher first-half profits, saying it was confident about its medium-term outlook as demand for outsourcing gathered pace.

The company, whose clients include the BBC, the NHS and retailers including Sainsbury’s, said pre-tax profits rose 10.3 per cent to £30.1m in the first half of the year, despite choppy market conditions.

Its support services arm grew in operating profit by 76 per cent to £15.7m, offsetting declines in profits in its construction and equipment services divisions, hit by unrest in the Middle East.

Chief executive Adrian Ringrose said he anticipated growth being driven by international markets and from outsourcing in the UK.

“We are expecting more and more parts of the public sector to open up over time, particularly the local authorities which really bear the brunt of the cost savings and who have probably got the lowest penetration of outsourcing in their operations,” he said.

Interserve recently announced contract wins for two developments in Qatar through its associate company, Gulf Contracting, worth a total of £70m.

The firm, which serves local councils and retailers including Centrale shopping centre in Croydon, has been helping to clean up the damage after the riots.
The group said it is maintaining its outlook for 2011.