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Interserve grows first half profits 10%

10 Aug 11 Interserve has reported a 10% rise in profits for the first half of the year on slightly subdued revenues.

Chief exec Adrian Ringrose
Chief exec Adrian Ringrose

For the six months to 30 June 2011, Interserve had total revenues of £928.0m, down 1.7% on the £944.5m made in the first half of 2010. Profit before tax was up 10.3% to £30.1m (2010 H1: £27.3m).

Progress was made in reducing debt and pension liabilities. Net debt reduced to £35.8m at 30 June 2011 from £53.1m a year earlier. Pension deficit (net of taxation) was sliced from £75.8m to £22.1m.

The Support Services division reported revenue of £538.0m (2010 H1: £538.2m), with operating profit up 76% to £15.7m (2010 H1: £8.9m). The operating margin improved from 1.7% to 2.9%.

In Construction, revenue (including share of associates) was down 5.5% to £484.1m (2010 H1:£512.4m). Operating profit was down 6.4% to £10.2m (2010 H1: £10.9m), with margins sliding from 10.3% to 8.9%

Equipment Services (formwork and falsework) saw revenue rise 8.6% to £74.3m (2010 H1: £68.4m) but operating profit fall 23% to £5.9m (2010 H1: £7.7m). The Middle East is an important region for this division and trading was impacted by Arab Spring uprisings, the company said.

Chief Executive Adrian Ringrose said: "Interserve has performed well, delivering headline profit growth despite challenging market conditions. Support Services generated strong growth, which, accompanied by a robust performance from Construction, more than offset the ongoing cyclical pressures in Equipment Services.

"Encouraged by the progress achieved in the first six months of the year and a growing bid portfolio, we maintain our guidance for 2011 and reiterate our belief that we have the capability to double earnings per share over five years."

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