28th Feb 2014 12:24
LONDON (Alliance News) - Construction company Interserve PLC Friday reported a 62% fall in pretax profit for the full year, after last year's results benefited from a one-off gain of GBP114.9 million on the disposal of the majority of its private-finance initiative project.
The FTSE 250 company also launched a share placing as it announced the acquisition of the Initial Facilities from Rentokil Initial PLC for a price equalling a third of its own market cap.
Interserve posted pretax profit of GBP68.1 million for 2013, down from GBP179.8 million in 2012, but revenue grew 12% to GBP2.19 billion from GBP1.96 billion.
Despite challenging conditions, a number of Interserve's segments saw growth including the support services arm which improved 7.0% in the UK to GBP1.20 billion from GBP1.12 billion, with the international support services arm rising to GBP100.5 million from GBP31.3 million.
The performance in international support services segment was boosted by the acquisitions of two new businesses, resulting in an increase in operating profit of 11% to GBP4.1 million from GBP3.7 million.
The construction arm, which offers design, consultancy and construction services, saw UK revenue rise 8.8% to GBP802.2 million from GBP737.2 million, while internationally revenue rose 7.1% to GBP215.9 million from GBP201.6 million.
Full-year operating margin rose to 3.4% from 3.3% reflecting a stronger second half.
During the period the company won GBP2.5 billion of new business, including work with the BBC, University of Sussex, the Royal Navy and the Ministry of Defence.
In a separate note, the company said it plans to buy Rentokil's Initial Facilities business for GBP250 million funded by debt and an equity placing 12.9 million shares, or 9.99% of the company's total. The share placing is being underwritten by JP Morgan Cazenove and Numis, who will price the placing after the completion of the bookbuilding process.
At Interserve's current share price, the placing would raise about GBP76.8 million gross.
The stock was trading at 594.95 pence Friday morning, up 20.45 pence or 3.6%.
"We have confidence in the continued growth potential of the business, which is reflected by our proposed acquisition of Initial Facilities," Chief Executive Adrian Ringrose said in a statement. "The acquisition of such a complementary business allows us to deliver further against our growth strategy."
The company declared a dividend of 14.7 pence, up from 14.1 pence, bringing a total dividend of 21.5 pence, up from 20.5 pence
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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