Interserve targets new markets drive

City A.M. Reporter
OUTSOURCING giant Interserve said new markets and growing support services work would balance another weak year in its construction division.

The company, whose services range from cleaning Sainsbury’s supermarkets to building shopping centres in the Middle East, posted a 4.6 per cent rise in 2011 underlying pre-tax profits to £72.8m, meeting analysts’ expectations.

The FTSE 250 company, which employs around 50,000 people, said it had a forward order book of £5.6bn -- more than twice its 2011 revenue of £2.32bn -- with a further £7bn of opportunities identified, as work in markets such as justice, healthcare and local government picks up in the UK and the appetite for outsourcing in countries like Qatar and the UAE increases in the Middle East.

“Our order book is up, our net debt is down, we are generating a lot of cash, we are winning work, and we have got some very clear guidance on our margin development,” chief executive Adrian Ringrose said.

It also raised its full-year dividend by 5.6 per cent to 19p. Revenues in its support services division were flat, while a 10 per cent rise in its concrete moulding equipment arm, helped by growth in Australasia and the Far East, was largely countered by a slump in its construction division, hit by subdued activity across much of the developed world.

“These are good results from Interserve, with pre-tax profit coming in at the top end of expectations,” Panmure Gordon analysts wrote in a note.