News Column

Interserve Leads FTSE 350 On 36% Jump In Profit And 10% Dividend Hike

August 6, 2014

Sam Unsted

LONDON (Alliance News) - Interserve PLC Wednesday posted a big rise in revenue and pretax profit in the first half of 2014 and hiked its dividend on the back of improved demand in international construction and support-services businesses.

The FTSE 250-listed support services and construction firm said revenue jumped 29% to GBP1.37 billion in the six months ended June 30 from GBP1.07 billion in the same period a year earlier, boosted by higher revenue from its support services, construction and equipment services businesses.

Pretax profits rose 36% to GBP50.2 million from GBP36.8 million last year, leading the company to hike its interim dividend by 10% to 7.5 pence from 6.8 pence.

Interserve shares were boosted by the positive results, up 2.6% to 629.00 pence, making it the top riser in the FTSE 350.

The group said it secured GBP2 billion in new contracts over the six-month period and said its pipeline of future work now stands at GBP7.5 billion.

The strong half-year performance was driven by the rise in revenues from its UK and international support services businesses. Revenue from the UK support services business was up 35% to GBP808.5 million in the half-year, while international revenue more than doubled over the period to GBP58.7 million from GBP22.8 million last year.

The UK support services business was boosted by the start of a five-year, GBP150 million contract with the British Broadcasting Corp and by a GBP322m contract won from the UK Ministry Of Defence to manage the National Training Estate Prime Contract.

In the international support services arm, the group won new contracts from Qatar Shell GTL, Occidental Petroleum Corp and ExxonMobil Corp over the period.

Elsewhere, Interserve'sUK construction arm posted an 11% rise in revenue in the period to GBP432.6 million, from GBP387.6 million last year.

The equipment services arm also put up a strong performance, posting an 8.7% rise in revenue to GBP90.9 million and seeing its contribution to the group's operating profit rise 65%.

"It has been a very good first half of the year for Interserve. We have delivered strong organic growth, achieved through robust performances from our UK Support Services and Construction businesses and excellent results in Equipment Services," said Interserve Chief Executive Adrian Ringrose.

"Our financial position remains strong which, together with our growing future workload, underpins the board's confidence in our positive outlook and the increase in the interim dividend to 7.5 pence," Ringrose added.

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Source: Alliance News

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