10th Jan 2012 07:00
10 January 2012 Interserve TRADING UPDATE Performing well and capturing new opportunities
Interserve, the international support services and construction group, today provides a trading update in advance of its annual results announcement on 29 February 2012.
* Trading, underlying EPS and cash generation in line with expectations
* Headline EPS further enhanced by the benefit of tax settlement
* £0.4 billion new contracts announced today, taking total of major contract
announcements over last 12 months to £1.9 billion
The Group's performance remains in line with the Board's expectations and with the guidance given in the Interim Management Statement published on 14 November 2011. Support Services has continued to deliver significant profit growth, on broadly stable volumes, as a result of our far-reaching margin enhancement programme. As previously noted, performance in Construction has been resilient, although impacted by margin pressures and increased competition in the current economic environment. Overall trading in Equipment Services is starting to recover, with strong performance in Australasia, the Pacific Rim and Saudi Arabia helping to counteract the impact of the Arab Spring and cyclical weaknesses elsewhere.
Since our last announcement we have won a further £0.4 billion of contracts, taking the total of major contract wins over the last 12 months to £1.9 billion. These include:
* West Yorkshire Police: chosen, in consortium, as successful bidder for the
construction of two new divisional headquarters, custody suites and a
specialist operational training facility (incorporating firearms ranges and
public-order and driver training facilities), and the provision of FM
services for 25 years thereafter.
* Daewoo, Oman: infrastructure for a new 2,000MW power station in Sur for the
Oman Power and Water Procurement Company.
* Qatar Shell GTL: we have won a place on a three-year Plant Change
Construction Services framework agreement, with a two-year extension
option, to undertake services on the world's largest gas-to-liquid
processing facility in Qatar.
* NHS Wales: we have won places on all three regional construction framework
agreements in the Designed for Life: Building for Wales 2 programme, which
lasts for four years plus a possible two-year extension.
* Preferred bidder for a cross-departmental contract (Department for
Education, Department for Communities and Local Government, Ofqual and
Queen Elizabeth II Conference Centre) to provide facilities management (FM)
services for a five-year period with a possible two-year extension.
* Leeds City Council: financial close on the Holt Park wellbeing centre. We
will build the facility and provide FM services for 25 years thereafter.
In addition we are pleased to announce that we have been selected by the Ministry of Justice in its new framework for the provision of custodial services across the prison estate. This framework is integral to the government's strategy of opening up Offender Services to competition and represents a significant potential new business stream for Interserve.
Chief Executive Adrian Ringrose commented, "We are performing well and are identifying and capturing a number of new opportunities. Our focus on long-term relationships continues to be rewarded with contract wins across a variety of sectors, geographies and business streams.
"Looking forward, we anticipate that increasing pressure on UK public sector spending will provide us with further outsourcing opportunities, helping to offset a reduction in construction activity. Internationally we are well positioned both to grow our existing businesses and to expand the range of our offerings in some of the world's fastest-growing economies."
- Ends -
An electronic copy of this Trading Update will be available to download from the Company's website, www.interserve.com.
For further information please contact:
Adrian Ringrose, Chief Executive 0118 932 0123 Tim Haywood, Group Finance Director 0118 932 0123 Giles Scott, Head of Corporate Communications 0118 960 2307 Elizabeth Morley / Tom Eckersley, Maitland 020 7379 5151
About Interserve
Interserve's vision is to be the Trusted Partner of all our stakeholders. We are one of the world's foremost support services and construction companies, operating in the public and private sectors in the UK and internationally. We offer advice, design, construction, equipment and facilities management services for society's infrastructure. Interserve is based in the UK and is listed in the FTSE 250 index. We have revenue of £1.9 billion and a workforce of nearly 50,000 people worldwide. Website: www.interserve.com.
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