Interserve sees profits rise as it acquires Initial

Headline profits at Interserve rose by 7.7% last year while revenue grew by 12% to just under £2.2bn, as it claims its policy in construction of focusing on repeat business is paying off.

The release of the full-year results came on the same day the company agreed to pay £250m to buy facilities business Initial Facilities from a subsidiary of Rentokil.

The company says the acquisition, which has been partly financed by a £75m share placing, will put it among the UK’s top three support service providers by revenue.

The headline pre-tax profit figure excludes a one-off gain of £114.9m in 2012 from the disposal of most of its PFI portfolio. Including this figure, pre-tax profit actually went down by 62.1% to £68.1m.

Within the company’s UK construction business, operating profit was 0.6% ahead of the 2012 figure at £14.7m, while revenue was up 8.8% at £802.2m. Margins remained within the expected range at 1.8%, while the order book remained stable at £1.0bn.

The company says it has benefited from diversification into select sectors such as energy from waste, with a £146m scheme currently underway in Glasgow, and a recently announced £15m joint venture with Babcock & Wilcox Vølund in Peterborough.

It says Paragon, the fit-out and refurbishment company it acquired in May, is thriving from being part of a larger group that gives it access to larger projects such as HM Courts and Tribunal Service.

The company’s ongoing relationship with Jaguar Land Rover will see it continuing to work on multi-million projects right through this year.

On the international market it is beginning to see the signs of an upturn in the United Arab Emirates and Qatar, although the £5.1m it spent in exiting its business in India – a country “where results and future prospects did not meet expectations” – has been included as an exceptional item in this year’s figures.

Chief executive Adrian Ringrose said the construction division had remained “resilient”.

He said: “2013 has been another good year for the business, and despite challenging conditions in many of our markets, we delivered substantial growth in both revenue and headline profit, and made important strategic progress.”

Your News

If you've got a story that would be of interest to Builder & Engineer readers, send us an email

Features

2017-05-31 13:33

The rate of Insurance Premium Tax (IPT) will rise by two per cent on June 1 to 12 per cent on all non-exempt transactions. Martin Bennison, managing director at construction finance firm Ultimate Finance, explains what this means for UK construction companies.

2017-05-25 08:41

Building Information Modelling (BIM) is growing in popularity and is now mandatory for centrally funded public-sector projects. Experts and the curious are gathering more and more frequently at dedicated congresses, exhibitions and workshops. Many people are now asking: Where does the UK stand on the issue of BIM and the digitisation of the construction industry?

2017-05-10 10:47

Opening site doors to more females is vital to plugging the construction skills gap, reports Claire Cameron

THE construction industry continues to be plagued by a well-documented skills gap with some suggesting the shortage could get worse before it gets better.

2017-05-08 14:27

If you work on a building site, are self-employed or have a zero-hours contract, you might be surprised to know you work in the ”gig economy”. This is the economy characterised by temporary work and irregular hours, pay and working conditions.

2017-03-29 10:31

Jeremy Gould, VP sales Europe, TomTom Telematics, discusses how technological developments in vehicle telematics have opened up new workflow management possibilities for the construction industry

2017-03-21 09:31

With the demand of oil increasing, it’s estimated that the Earth will reach its full capacity for oil consumption at some point within the next 20 years. This is despite the production of oil decreasing, and the construction industry is no exception to this, reports Niftylift.

2017-03-17 10:55

With construction firms leading the way in drone technology, Claire Cameron takes a closer look at how unmanned aerial vehicles (UAVs) can be used onsite

2017-03-07 16:20

While the physical safety of workers is prioritised on construction sites, mental health is often overlooked, reports Claire Cameron

Free E-newsletter Sign-Up

Sign up for our free e-newsletter

Looking for a company or service?