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Interserve reports higher profits, foresees robust performance

Published: 09:54 11 Aug 2009 BST

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Maintenance and building group Interserve (LSE: IRV) said profits and revenues both grew strongly in the first half, while outlook for near-term performance was robust..


In its half-yearly report released today, Interserve said pre-tax profits were up 18.7% to £40 million on revenue of £951.2 million, a 4.1% year on year increase. Earnings per share upped 19.7% to 23.1p.


The company has also improved its financial position, slashing the net debt 26.3% to £85.1 million.
"The half-year was another period of growth and development for Interserve. Benefiting from our long-term strategy we increased profits, reduced net debt and secured further contract wins with a whole-life value in excess of £1 billion that provide improved forward revenue visibility. As a result, we remain confident in our prospects and expect to deliver robust near-term performance and sustain our long-term growth," said CEO Adrian Ringrose.


Interserve said it was operating in better conditions than private sector companies and was lifted by strong trading in the Middle East and a robust demand in the UK public sector.


The strong results led the company to up its interim dividend to 5.5p from 5.3p.


Interserve simultaneously announced it has been named as a delivery alliance partner in South West Water’s K5 framework programme. The company is expected to have a £100 million stake in the £590 million programme, which is subject to the ongoing price review by regulator Ofwat, which is expected to get wrapped up in November.


Interserve recently landed a contract worth in excess of £200 million from HSBC (LSE: HSBA) to manage over 1,600 retail and 80 office sites, including the banking group’s headquarters in Canary Wharf.


The company added almost 8% on the news on the London Stock Exchange this morning.

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