Interserve Regulatory News (IRV)

12 May 2009 07:00

12 May 2009

AGM & INTERIM MANAGEMENT STATEMENT

Interserve Plc, the services, maintenance and building group, is holding its Annual General Meeting at 10:00am today and also issues its Interim Management Statement covering the period from 1 January 2009 to date.

Trading performance

Trading has continued well overall, in line with expectations. The Group is also benefiting from the impact of continued weakness of sterling with respect to overseas earnings.

The public and privatised sectors in the UK, which account for around two-thirds of our revenue, remain robust and continue to offer opportunities for which we are well-placed. As previously highlighted the private sector remains weak and we have a number of cost reduction measures in place to mitigate the reduced demand from our clients in this sector.

Our Middle East operations continue to win new work with long-term customers, benefiting from the strength and influence of our local partnerships. Our associates' future workload remains stable compared with the year-end position albeit there is some evidence of project delays, particularly in Dubai. Payment cycles have lengthened across the region since the year-end and as indicated previously we continue to review closely and, where appropriate, increase our level of debt provisioning whilst maintaining anticipated trading performance.

Our equipment services business is trading well and benefiting from the investments made in prior years. We have adjusted capital expenditure and operating costs in anticipation of a reduction in activity levels and we are focusing on sustaining equipment utilisation.

We continue to manage our PFI portfolio actively, adding new projects and generating cash from the more mature projects. During the period we were named preferred bidder on two new projects, the Derby waste-treatment contract and the Sandwell Council Building Schools for the Future (BSF) programme. Separately, cash amounting to £15m has been released from the portfolio via the sale of our equity and loan stock interests in the Sheffield Schools project and the repayment of the majority of our subordinated debt in the University College London Hospital project.

Contract Wins

Since the year end we have won a number of important contracts across a diverse range of sectors, notable amongst which were:

* Waste: Preferred bidder, in conjunction with United Utilities, for the £500 million PPP Derbyshire waste-treatment contract; * Health: * One of the five Principal Supply Chain Partners on the £600 million Frameworks Scotland healthcare programme; * A £20 million contract to design and build a community hospital in Dover, procured via the ProCure21 framework programme; * A 19-year contract to deliver facilities management services on behalf of Leeds Partnerships NHS Foundation Trust; * Education: * Preferred bidder on the Sandwell BSF project, providing facilities management and construction services worth over £280 million; * The design and build of Kingswood School, worth £20 million; * Local Authority: A ten-year contract worth £5 million a year to deliver facilities management services to Ealing Council; * Commerce: A four-year framework agreement involving construction, refurbishment, fit-out and life-cycle works across Mapeley's UK estate; and * Middle East: Six construction contracts won by our associate companies with existing clients in Qatar and the UAE and servicing the infrastructure, industrial and commercial sectors. These are worth c. £215 million in total.

These contracts further underpin our future workload, which stood at £6.5 billion including our share of the Middle East associates at the year-end.

Net Debt and Facilities

There has been no significant change in the financial position of the Group since the publication of the results for the twelve months ended 31 December 2008. The Group retains a resilient balance sheet, with committed facilities in place of £250 million, expiring in or after 2011.

The triennial review of the group pension fund is underway, based on the position of the scheme as at the end of 2008.

Outlook

The Group will continue to execute its strategy of developing and maintaining long-term client relationships, building a well-balanced business mix and exploring new markets and models. We continue to take action where necessary to mitigate the impact of the current economic climate on activity levels. However, with strong revenue visibility and a broad range of high-quality opportunities in our markets we continue to believe that the Group's operations are well placed to deliver another year of progress in 2009.

For further information please contact:

Adrian Ringrose, Chief Executive 0118 932 0123 Tim Jones, Group Finance Director 0118 932 0123 Matt Jones, Head of Investor Relations 0118 960 2280 Elizabeth Morley / Tom Roberts 020 7379 5151 Maitland

About Interserve

Interserve's vision is to be the Trusted Partner of all our stakeholders. We are a services, maintenance and building group operating in the public and private sectors in the UK and internationally. We offer advice, design, construction and facilities management services for society's infrastructure and provide a range of plant and equipment in specialist fields. Interserve is based in the UK and is a FTSE 250 company. It has revenue of £1.8 billion and a workforce of 50,000 people worldwide. Website: www.interserve.com.