Interserve makes £28m interim pre-tax profit on £860m turnover

Interserve generated an interim pre-tax profit of £28m in the first half of 2007, representing a rise on the figure of £23m in the comparable period last year.

Turnover in the six months to 30 June 2007 was £860m, a one-third rise on the previous figure of £650m.

Adrian Ringrose, chief executive, said: “The acquisitions of MacLellan and Madina have each brought us capabilities which dovetail well with our existing operations and, together with our start-up business in South Africa, give us access to new growth markets.

“The former MacLellan operations are trading well. With our markets in the UK and in the Middle East offering plenty of opportunities, we are well placed to continue our strong organic growth.”

Interserve’s future workload stands at £5.9bn, up from the figure of £5.6bn a year earlier.

Net debt has been reduced to £100m as a result of “a strong operational cash performance together with the timing of advance receipts on a number of contracts”.

Interserve has five market-facing divisions. The chunkiest returns came from three of the five:

• facilities management – operating profit of £13m
• project services – operating profit of £11m
• equipment services – operating profit of £10m

One of the other two divisions, PFI Investments, contributed £3m to group profits.

At the end of the period, Interserve had 26 signed contracts and four more at preferred bidder stage. the total investment on the signed contracts runs to £59m of which £36m has already been made.

The group had finance costs running to £19m though this was offset by an investment revenue of £20m.

The group operates globally in six separate global regions. The three that generated the best returns were: UK – with an operating profit of £12m; Middle East & Africa - £8m; and Australasia - £4m.

The all-labour injury incidence rate (i.e. including subcontractors) is one of Interserve’s Key Performance Indicators. The annualised RIDDOR-reportable accident and incident rate for the first six months of 2007 was 421 accidents per 100,000 workforce, which compares to 744 for the equivalent period in 2006.