UPDATE 1-Interserve to keep equipment services unit after review

(Adds analyst comment, details, background, share movement)

By Esha Vaish

Oct 10 (Reuters) - Support services and construction companyInterserve Plc has decided to keep its RMD Kwikformbusiness after a strategic review because it brings the firmmore international exposure.

Interserve also said RMDK, which contributed 32 percent ofgroup operating profit last year, was a highly cash generativebusiness, underpinned by operating margins of over 20 percent.

The business provides support structures while new buildingsare being constructed.

"Whilst some of our end markets face some near termuncertainty, the structural drivers for global infrastructureremain strong," the company said in a statement.

"RMDK is a global business, providing an important elementof diversification to the rest of the group's predominantlyUK-based earnings profile," it added.

Shares in the company, whose other activities includeproviding care services and repairing historic buildings, fell 5 percent to 337.25 pence at 0750 GMT.

Numis Securities analyst Howard Seymour said although RMDKwas a strong business some investors would be disappointed bythe decision to keep it.

A sale could have fetched about 300 million pounds ($373million), helping Interserve to get rid of its debt, saidSeymour, who has a "buy" recommendation on Interserve's stock.

Interserve had net debt of 275.6 million pounds as ofend-June and has forecast net debt of 300 million to 320 millionpounds for the year to end December.

Interserve also said it would incur non-recurring charges ofabout 17 million pounds ($21 million) over the next 12 months tocarry out strategic changes at RMDK, which would includerestructuring operations in a number of smaller, less attractivemarkets.

The British company could also face a slowdown in its homemarket, with major business surveys showing that Britain'seconomy appears to be losing steam following the country's votein June to leave the European Union.

Peers Mitie and Capita have already warnedthat customers have been reluctant to sign off on majorcontracts since the Brexit vote, prompting analysts to warn thatInterserve could also be hit. ($1 = 0.8042 pounds) (Reporting by Esha Vaish in Bengaluru; Editing by Sunil Nair)