Equipment is Interserve's star performer

Interserve’s equipment services division, which provides temporary structural forms and other equipment for complex projects, was the jewel in the group’s crown last year.

It achieved an operating profit of £21m in 2005 from a turnover of £110m.

The division generates revenue through both hire contracts and equipment sales of both new and used equipment. Hire income, which typically accounts for half the turnover, was up by 18%.

Latest financial results from Interserve for the 12 months to 31 December 2005 show turnover up 4% to £1.2bn, while pre-tax profit was 16% higher at £48m.

Interserve’s other three main divisions are facilities services (turnover £440m); industrial services (£160m); and project services (£510m). None of them beat the equipment services division on operating profit.

Interserve’s group services costs rose £3m to £15m as a result of a bigger spend on PFI bidding as it pursues “growth in the long-term market”.

Chief executive Adrian Ringrose enthused about Interserve’s performance in Dubai, Qatar and Oman.

“Market conditions have been buoyant, fuelled by oil price movements and further expansion into tourism and real estate, backed by government policies to encourage development,” he said.

Interserve’s defined benefit pension scheme, when assessed to IAS 19, the new accountancy standard, has obligations running to £510m and assets of £380m. The gap of £130m is the same as in 2004. Last year, employer contributions ran to £10m.