Shares in support services group Interserve (IRV) initially dipped on the release of first-half results that detailed a 12 per cent rise in headline operating profit to £60.3m, along with £2bn in new business contracts. Chief executive Adrian Ringrose says that investors may be wary of the impact that the government's recently announced reform of the national minimum wage will have on margins - an overall hit of £10m to £15m is now being touted.
Revenue for support services UK increased by 15 per cent £933m, while margins increased slightly to 4.3 per cent. The business won a number of long-term contracts in the travel sector including MTR Crossrail and KeolisAmey Docklands. The equipment services business was the standout performer, increasing operating profit by a third to £18.6m, while capital expenditure was £10.4m. This was supported by a strong performance in the Middle East, benefiting from increased demand in Qatar and the UAE where large-scale infrastructure projects are under way.