Interserve, the international support services and construction group, has reported that its future workload is up to £7.5 billion (FY 2013: £6.4 billion) with the publication of its half-year results for the six months ended 30 June 2014.
The UK-headquartered firm secured £2 billion of new contracts in the period and reported strong organic growth - 15.4% in total operating profit, 14.5% in earnings per share and 9.1% in revenue.
The Group performed strongly in the first half of the year with significant overall revenue and total operating profit growth of 28.7 per cent and 35.9 per cent respectively. Underpinning this was strong organic growth of 9.1 per cent in revenue and 15.4 per cent in operating profit, the balance being attributable to the impact of acquired businesses. Approximately two-thirds of Interserve’s revenue is derived from framework agreements and repeat business relationships.
The firm completed the £250 million acquisition of Initial Facilities in March. Interserve said it had grown revenue and profit in its Support Services division in the UK and continued to develop its Oil and Gas services business in the Middle East. The group’s construction businesses generated increased revenues in the period as markets in both the UK and the Middle East were beginning to recover, albeit at variable speeds. The Equipment Services division continued to grow both margins and revenue through widespread increases in activity. Interserve said that work winning was strong in the period, resulting in a substantially increased future workload.
The Interim Management Statement said that its UK construction division had performed strongly, with demand beginning to improve, although margins remain tight as supply chain pressures feed through. Contribution to total operating profit increased by 8.1 per cent to £8.0 million. Margins remained stable at 1.9 per cent and future workload rose to £1.4 billion. (FY 2013: £1.0 billion).
During the period Interserve said it had taken a number of actions to prepare the Group’s financial structure for the next phase in its growth and to sustain a strong balance sheet through a share placing and a US Private Placement of US$350 million.
Chief Executive Adrian Ringrose commented:
"It has been a very good first half of the year for Interserve. We have delivered strong organic growth, achieved through robust performances from our UK Support Services and Construction businesses and excellent results in Equipment Services.
“Market conditions in International Construction and Support Services continue to be highly competitive, although we are now starting to see signs of improving demand.
"Our strong organic growth was complemented by the performance of our acquisitions. Initial Facilities traded in line with our expectations during the period and its integration is progressing smoothly.
"Our financial position remains strong which, together with our growing future workload, underpins the Board's confidence in our positive outlook and the increase in the interim dividend to 7.5 pence."
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