Reassuring statement from Interserve

Support services and construction group Interserve has traded in line with expectations in 2011, and is sticking with its aim to double earnings per share over five years.The Support Services division is making further progress and is expected to deliver strong profit growth in 2011 and maintain a healthy workload. The Projects Services International unit is performing in line with expectations and its workload remains stable compared with the 2010 year end, the group said. Project Services UK is performing to plan and has increased its future workload since the year end, while Equipment Services is making further progress in Australasia and the integration of the recent US acquisition is proceeding well. Despite political unrest in Bahrain and North Africa and continued challenging conditions in a number of other markets, management continues to expect the Equipment Services division to resume growth in 2011."All in all a reassuring statement highlighting good revenue visibility," declared broker Northland. "The company remains positive that it will double earnings over the next five years but this is reliant on an improvement in margins, particularly in the support services division. We remain concerned on the outlook for growth in the UK but believe Interserve can make operational improvements which will underpin earnings growth," the broker added. ---jh