Interserve buoyed by PFI sale

A double-digit rise in revenues in the core support services business reflected increased demand for outsourcing from both government and the private sector. Combined with a 30 basis point rise in margins to 4.3 per cent, this helped drive operating profits up 20 per cent to £48m. Adrian Ringrose, chief executive, expects margins to hit 5 per cent by the end of 2013, boosted by expansion into overseas oil and gas sectors.

That's just as well because margins are coming under pressure in construction, where the trading environment is "challenging". So, although revenue was little changed at £737m in the UK, operating profits slumped by almost a fifth to £14.6m as margins contracted from 2.5 per cent to 2 per cent. It was a similar story overseas, where volumes are being held back as clients remain cautious. Mr Ringrose expects further margin weakness in the UK and no recovery until 2014 at the earliest.

Future workload of £6.3bn, up £700m on a year ago, includes £2.7bn of new orders and means that 78 per cent of current year revenues have been secured. Broker Peel Hunt forecasts 2013 adjusted pre-tax profits of £80m and EPS of 45.6p (from £78.4m and 47.2p in 2012).