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Interserve sees record revenue growth as it inks £110m MoD deal

Interserve has announced record revenue growth and a pre-tax profit hike, as it revealed a £110m MoD contract extension.

The firm has announced 8.6 per cent revenue growth for its half-year results, from £984m (H1 2012) to £1.07bn.

Its order book stands at £6.7bn, up by £400m since the start of the year, while headline pre-tax profits for the first half were £36.8m, up from £34.2m in H1 2012.

Chief Executive Adrian Ringrose hailed its “resilient performance” in the UK, particularly in support services, but admitted that internationally its performance was “mixed”.

He said: “Our financial position remains strong which, together with our growing future workload, underpins the Board’s confidence in our ability to deliver our medium term strategy, reiterating guidance for 2013 and increasing the interim dividend to 6.8 pence.”

In support services, its UK margin increased by 0.8 per cent to 4.2 per cent, with UK revenue of £597.5m (up from £572.1m in 1H 2012).

Its construction margin fell to 1.9 per cent, (H1 2012: 2 per cent) in the UK, but internationally dropped by 2.3 per cent to 4.8 per cent overall.

It said: “We have developed a significant new revenue stream in the construction of energy from waste (EfW) plants. In addition to the major EfW scheme in Glasgow (secured in 2012) where all consents have now been achieved and pre-construction work is underway, our joint venture with Babcock & Wilcox Vølund A/S was appointed to undertake the design, procurement and construction of an EfW plant in Peterborough, with a contract value to Interserve of £15m.”

MoD contract extension:

Landmarc Support Services (in which Interserve owns a 51 per cent share alongside Pacific Architects & Engineers) has been awarded a contract extension worth around £110m with the Ministry of Defence until July 2014, with the option to extend for up to a further six months until February 2015.

Landmarc will continue to support the Defence Infrastructure Organisation to manage military training facilities across the MoD’s 160,000 hectares of built and rural UK training estate, a position it has held since 2003.

The contract covers over 120 sites, including more than 8,000 buildings and 12,000 targetry items worldwide. These range from small battery powered targets to large electrical moving artillery targets, which are controlled remotely.

Steve Utley, project director at Landmarc said: “For the past decade, we have been partnering with the MoD to ensure that the training estates deliver a safe and sustainable place to train for our armed forces.  We are also committed to working closely with the people in the communities that live and work around them.

Chairman Lord Blackwell said: The changing demographics of the population, together with the pressing need for significant investment in energy, transport and environmental infrastructure will continue to be important drivers of construction demand.

“We believe that we are well-placed to help Government tackle these issues. At the same time we are also successfully growing our private-sector client base, exemplified by contracts secured in the period to build Jaguar Land Rover’s engine manufacturing plant in Wolverhampton and our joint-venture agreement to re-develop the Haymarket site in Edinburgh.”

More to follow.

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