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Interserve wins £1.9bn of contracts in 2011

Interserve has won £1.9 billion of contracts in 2011, it said this morning.

The firm reported £400m of new contracts, taking the total for major contract announcements over the last year to £1.9 billion.

Posting a trading update ahead of its full year results in February, the firm said performance is in line with expectations, with increased outsourcing opportunities likely in the public sector in 2012.

Support services has continued to provide “significant profit growth” on broadly stable volumes in 2011, with construction resilient but suffering margin pressures, increased competition and a challenging economic backdrop.

Analysts suggest a full year pre-tax profit to be around £73m, up from £64m last year. Interserve saw a £1.87bn turnover in 2010.

Chief Executive Adrian Ringrose said today: “Our focus on long-term relationships continues to be rewarded with contract wins across a variety of sectors, geographies and business streams.

“We anticipate that increasing pressure on UK public sector spending will provide us with further outsourcing opportunities, helping to offset a reduction in construction activity.

“Internationally we are well positioned both to grow our existing businesses and to expand the range of our offerings in some of the world’s fastest-growing economies.”

Interserve said it has been selected by the Ministry of Justice in its new framework to provide custodial services across the prison estate.

Other wins include places on all three regional construction framework agreements in the Designed for Life: Building for Wales 2 programme, and a cross-departmental FM contract for Department for Education, Department for Communities and Local Government, Ofqual and Queen Elizabeth II Conference Centre.

Overseas, wins include infrastructure for a new 2,000MW power station in Oman and a three-year Plant Change Construction Services framework in Qatar.

The firm also said trading in equipment services is starting to recover, with “strong performance in Australasia, the Pacific Rim and Saudi Arabia helping to counteract the impact of the Arab Spring and cyclical weaknesses elsewhere”.

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