IRV Interserve

 
TIDMIRV 
 
18 May 2011 
 
                                  Interserve 
 
                         INTERIM MANAGEMENT STATEMENT 
 
                            Good start to the year 
 
Interserve, the international support services and construction group, is 
issuing its Interim Management Statement covering the period from 1 January 
2011 to date, in advance of its Annual General Meeting which will be held at 
11:00 a.m. today. 
 
Highlights 
 
* Trading during the period in line with expectations 
 
* Contract wins totalling over GBP400 million 
 
* Excellent revenue visibility: c. GBP1.8 billion(1) for 2011, c. GBP1.0 billion(1) 
  for 2012 
 
* Strong cash generation, further progress on net debt with current position 
  below year-end 2010 
 
Chief Executive Adrian Ringrose commented, 
 
"We've had a good start to the year and reiterate our expectation of stable 
trading in 2011. We continue to believe that we have the capability to double 
earnings per share over five years, given our proven strategy, our attractive 
global mix of end markets in outsourcing and infrastructure and our strong 
financial position." 
 
Trading Performance 
 
The Group is performing in line with the Board's expectations and we maintain 
our outlook that trading in 2011 will be stable compared with 2010 and will 
show similar seasonality. 
 
* Support Services is making further progress and we continue to expect that 
  it will deliver strong profit growth in 2011 and maintain a healthy 
  workload. 
 
* Projects Services International is performing in line with expectations and 
  its workload remains stable compared with the 2010 year end. 
 
* Project Services UK is performing to plan and has increased its future 
  workload since the year end. 
 
* Equipment Services is making further progress in Australasia and the 
  integration of our acquisition in the USA is proceeding well. Despite 
  political unrest in Bahrain and North Africa and continued challenging 
  conditions in a number of our other markets we continue to expect the 
  division to resume growth in 2011. 
 
Contract Wins and Future Workload 
 
In recent months we have won a number of contracts in the UK and across the 
Middle East with a combined value of over GBP400 million, including: 
 
* Department for Work and Pensions' Work Programme in joint venture, worth 
  GBP130 million over five years; 
 
* Defence Infrastructure Organisation: GBP108 million two-year extension of the 
  South East Regional Prime contract; 
 
* Nottingham University Hospitals NHS Trust: preferred Principal Supply Chain 
  Partner for the next five-year ProCure21+ framework; 
 
* Industrial services contracts with BAE Systems, CE Electric, Keppel Seghers 
  and Syngenta worth GBP50 million in aggregate; 
 
* Leeds City Council: preferred bidder for the construction of the Holt Park 
  wellbeing centre and related facilities management thereafter, worth around 
  GBP24 million; 
 
* Majid Al Futtaim: construction of a shopping mall in Fujairah, UAE, worth 
  AED250 million; 
 
* Industrial services and fit-out contracts in Qatar with the Commercial Bank 
  of Qatar, Dolphin Energy, KEO, Maersk and Qatar Shell Gas-To-Liquids, worth 
  an aggregate QAR120 million. 
 
The above awards have contributed towards a modest increase in the Group's 
future workload compared with the 2010 year-end position of GBP5.3 billion(1), 
affording excellent revenue visibility of around GBP1.8 billion(1) for 2011 and 
around GBP1.0 billion(1) for 2012. 
 
Financial position 
 
Continuing control of capital expenditure and working capital across all 
operating divisions has led to an improvement in the net debt position compared 
with that reported as at 31 December 2010 (GBP53.8 million), and the Group 
retains a strong financial position. 
 
Outlook 
 
We reiterate our expectation of stable trading in 2011. We continue to believe 
that we have the capability to double earnings per share over five years, given 
our proven strategy, our attractive global mix of end markets and our strong 
financial position. 
 
Our medium-term growth strategy remains focused on our core markets of 
outsourcing and infrastructure. 
 
* We continue to enjoy success in the outsourcing market, as evidenced by the 
  extension of our long-standing relationship with the Defence Infrastructure 
  Organisation. Our ability to capture emerging opportunities was 
  demonstrated by our appointment to the Department for Work and Pensions' 
  Work Programme, and we look forward to taking advantage of further 
  opportunities as they arise. 
 
* In infrastructure we expect renewed growth in international markets such as 
  Qatar, our largest overseas market, and India, a market we recently entered 
  and which offers significant opportunities to expand both our service 
  offering and geographical footprint. 
 
An electronic copy of this Interim Management Statement will be available to 
download from the Company's website, www.interserve.com. 
 
(1) Including our share of associates 
 
 
For further information please contact: 
 
Adrian Ringrose, Chief Executive                     0118 932 0123 
Tim Haywood, Group Finance Director                  0118 932 0123 
Matt Jones, Head of Investor Relations               0118 960 2280 
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. We are based in the UK, have revenue of 
GBP1.9 billion and a workforce of 50,000 people worldwide. 
 
 
 
END 
 

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