12th Aug 2015 06:44
LONDON (Alliance News) - FTSE 250-listed construction and support services company Interserve PLC posted a rise in half-year profit on Wednesday on the back of robust revenue growth and a stronger order book at the end of the period, though it expects its UK support services business to see margins squeezed by the UK's new National Living Wage.
The company said its pretax profit for the six months to the end of June was GBP33.7 million, up 19% on the GBP28.3 million it posted a year earlier, as revenue increased by 16% to GBP1.60 billion from GBP1.37 billion.
Interserve said its order book stood at GBP8.3 billion at the end of the half, up 11% from the GBP7.5 billion it had on its books a year earlier, as it won GBP2.0 billion new contracts over the half, including with London Underground, along with oil and gas-related deals in Oman and Qatar.
The group said it would pay an interim dividend of 7.9 pence per share, up from 7.5p a year earlier.
"We have made good progress in the first half of the year in markets that offer both opportunities and challenges. We have delivered volume growth across the board, and strong profit performances in our Support Services, Equipment Services and International Construction businesses," said Adrian Ringrose, Interserve's chief executive.
Ringrose added that market conditions in the UK construction market have remained challenging, though demand has continued to strengthen, and said Interserve expects the implementation of the UK National Living Wage, announced in the Summer Budget, to have an initial adverse impact on its UK support services margins of around GBP10 million to GBP15 million in 2016, with this to ease over coming years.
"However, demand in our main markets continues to strengthen, 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 7.9 pence," Ringrose added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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