Interserve cautious over higher costs

Tougher competition and higher costs on some newer public sector contracts have hit contractor and support services group Interserve's performance so far in 2010."Overall, the business is performing in line with expectations, but trading during 2010 to date remains challenging in Support Services and Equipment Services, such that the second half weighting of profits will be more pronounced than usual," it added."A number of the newer public sector contracts continue to be impacted by significant mobilisation and transition costs. Contract cost reduction opportunities are in the process of being realised and the group remains confident that these contracts will deliver their full potential over the contract life," the group said.The private sector facilities management market is also very competitive, Interserve added.