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Interserve looks to new infrastructure and commercial markets

Interserve is monitoring the commercial market, as it considers boosting its construction presence in new sectors as part of its growth strategy.

Chief executive Adrian Ringrose said as a constructor, the business has been focusing on new markets including utilities.

“We are probably focusing more on parts of infrastructure that have been less important to us in the past through deals with National Grid and water companies and we would like to see some commercial developments,” he said.

“It’s a kind of spread betting approach where we look at new ways we can help ourselves and our clients. We need to be flexible.”

Interserve announced it had secured a £1bn pipeline for 2013, as well as a £1.9bn pipeline in 2012 when it released an interim management statement this week.

However it is currently bidding for work including Defence Infrastructure Organisation regional prime contracts and the £2bn Priority Schools Building Programme that have seen delays.

CN revealed this week that contractors are becoming increasingly concerned about the level of competition in the education sector and the amount of work to be won under the PFI schools programme.

Mr Ringrose said: “We have a long and successful history in education and we have built over 100 schools in our time. In the near time it looks like a busy marketplace but we are taking a longer-term view on where the children will be attending school in 20-30 years’ time and the current building standards in those areas.

“The ebb and flow between sectors is part and parcel of life. We have specialised people but as a constructor many of those skills are eminently transferrable across sectors. So if demand moves from sector ‘a’ to sector ‘c’ as long as we see it coming we can be prepared.

“We have been working in the public sector arena for decades so you are going to see changes to project timetables but these are valuable prizes on offer in terms of lengths of contract and sizes.”

Interserve has won more than £600m of work in 2012 from clients including the NHS, Ministry of Justice, Alliance Boots, Tata, Gammon-Hyundai, William Hill, Ladbrokes, BPP, Sainsbury’s, National Grid and the West Yorkshire Police Authority.

Mr Ringrose said he was “upbeat but realistic” about the industry’s prospects in the short-term, and that Interserve would continue to strategically positions itself within certain sectors such as outsourcing, and that support services remained strong.

“We have a strong balance sheet that we have been shrewd enough to use wisely rather than taking the first deal that comes along”, he said.

“In construction terms, neither the UK nor international markets are fantastically great places to be from a demand point of view but things are playing out according to how we thought they would.”

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