■ £1bn of new work won in 2012
■ Core support service margins improving
■ UK Construction steady
Support services and construction group Interserve has announced a solid trading update ahead of half years results on 15 August. Chief executive Adrian Ringrose noted that revenues and margins in the core support services business, responsible for 46 per cent of group revenue and around half operating profits last year, were both improving. Moreover, with over £1bn of new work won this year, analysts at Liberum Capital estimate the group order book has risen from £5.6bn to £5.8bn.
Analysts at Cannacord Genuity expect full-year adjusted pre-tax profits to rise from £72.8m to £75.2m, giving EPS of 44.5p, but note that "the combination of top-line growth in support services and ongoing improvement in equipment services growth trends leaves the risk to upside. We now think profits of £78-80m is feasible if positive trends continue through the second half."
Mr Ringrose said that the target of achieving 5 per cent margins in support services by 2013 was well on track and highlighted a backdrop of exciting opportunities from the Ministry of Justice outsourcing of prisons and probation services.
