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UPDATE 1-New contract wins boost Interserve as profit jumps
August 6, 2014 / 8:12 AM / in 3 years

UPDATE 1-New contract wins boost Interserve as profit jumps

(Adds CEO, analyst comments, background, shares)

By Li-mei Hoang

LONDON, Aug 6 (Reuters) - British building services and construction company Interserve said a string of new contract wins augured well for the future as it posted a 36 percent rise in first-half profit.

Chief Executive Adrian Ringrose said on Wednesday the group had secured future work worth up to 7.5 billion pounds ($12.7 billion), compared with 6.4 billion at the end of 2013.

“These are strong results. We’re pleased and it’s continuing three years of consecutive growth,” he told Reuters.

“Underpinning it all, we’re winning work. We have won about 2 billion pounds worth of contracts in the period, with a range of customers ... and looking forward, we think there is more to come,” he added.

The FTSE-250 company, whose services range from cleaning supermarkets to building shopping malls in the Middle East, said pretax profit for the six months to June 30 rose to 50.2 million pounds ($84.7 million) from 36.8 million a year earlier.

Its shares, which have risen 88 percent over the past two years, were up 2.1 percent to 625 pence at 0810 GMT.

“Interserve’s numbers are a tad better than was expected we believe,” said Whitman Howard analyst Stephen Rawlinson.

“The price has faltered a little recently dipping to 611 pence and we expect that these numbers and the positive mid term outlook should see some of the perkiness restored to the price,” he added.

Interserve, which operates in more than 40 countries, also posted a 29 percent rise in first-half revenue to 1.4 billion pounds, and raised its dividend by 10 percent to 7.5 pence per share.

Ringrose said the company’s equipment business, which accounts for 18.5 percent of operating profit, had experienced an outstanding period after profit rose by 64 percent year on year, helped by an improvement in the UK construction market.

Interserve’s recent acquisition of facilities management business Initial from Rentokil earlier this year also helped to add 600 million to its order book.

$1 = 0.5930 British Pounds Reporting by Li-mei Hoang; Editing by Neil Maidment and Mark Potter

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