Interserve reports positive outlook for Q3 of 2008

Interserve’s trading update, covering the third quarter of the year, says that all is well and the performance expectations that were spelt out back in August still hold.

The current market offers numerous opportunities, with the group listing them as:

• The positive market trends in UK outsourcing;
• The defensive qualities of Interserve’s UK construction activities which is focused on public sector clients and on working through long-term framework contracts;  
• Middle East and other international markets.

Outlook in its chief markets was as follows:

• Facilities Management. “We continue to see opportunities coming to market,” said Interserve this morning. “Mobilisation of the recent contract wins with the Home Office and the Foreign and Commonwealth Office is progressing well.”
• Specialist Services. Market conditions remain challenging. The division represents 10% of group turnover and is “expected to show a deterioration over the prior year performance.” The axe is being wielded and cost reductions are being implemented “in order to adjust capacity to meet reduced near-term demand.”
• Project Services. This sector of the UK construction market remains solid, underpinned by long-term structural requirements for public-sector facilities such as schools, hospitals and prisons. Work loads in Qatar, Oman and the UAE continue to increase.
• Equipment Services. Strong demand in the Middle East, improved performance in Australia and a growing presence in South Africa have offset more challenging conditions in Europe.

There has been no significant change in Interserve's financial position in the past four months.

“The group retains a resilient balance sheet, with committed facilities in place of £250 million, expiring in or after 2011,” said Adrian Ringrose, chief executive.