Interserve Plc, the services, maintenance and building group, has issued a confident trading update covering the period from 1 July 2009 to date. The Group has won a number of significant contracts in the UK water sector this year.

In its Interim Management Statement Interserve said it had benefitted from strong performances in the Group’s Middle East construction and equipment services businesses, combined with ongoing stability in the public and utilities sectors in the UK where demand for facilities management services remained strong. The company has continued to strengthen its focus on selected long-term contracts where it sees  the opportunity to add significant value.

However, on the facilities management side the Group continues to be adversely affected by challenging market conditions in the private sector, with both volumes and margins remaining under pressure.

The UK Project Services division has performed well, based on high levels of activity in the public and utilities sectors where Interserve benefits from secure work streams emanating from the framework agreements that are a feature of these sectors.

Since the end of June Interserve has continued to win significant new contracts in both the private and public sectors in the UK and overseas markets, which have helped maintain the Group’s future workload at the record £6.7 billion level reported at the half-year.The Board believes that the Group’s operations are well placed to deliver robust near-term performance and future growth.

The Group confirmed that it will pay the £11.6m fine it received in September in relation to the investigation by the Office of Fair Trading into the construction sector before the end of the year.

In August the company was named as preferred bidder for a £60 million Thames Water Utilities contract covering the creation of new facilities and upgrade works at the Riverside Sludge Digestion plant and as a Delivery Alliance Partner in South West Water's (SWW) K5 framework programme. The Interserve element of the SWW framework was estimated to be in the order of £100m of the overall programme, subject to the outcome of next week’s Ofwat price review. In July as part of the KMI Plus Joint Venture, Interserve announced the award of a £250 million contract for the Non-infrastructure Capital Delivery Framework with United Utilities - an extension into AMP5 of the AMP4 framework agreement, which was an option available to United Utilities subject to performance.