Interserve Regulatory News (IRV)

5 Nov 2008 07:00

THIRD QUARTER INTERIM MANAGEMENT STATEMENT

Interserve Plc, the services, maintenance and building group, announces its Interim Management Statement covering the period from 1 July 2008 to date.

Trading performance

The Group has continued to trade well overall, in line with the expectations as set out at the time of our half-year results in August, and continues to win new business in long-term market sectors that add to our future workload (see Contract Wins below). This resilience reflects the continued opportunities we have to take advantage of positive market trends in UK outsourcing; the defensive qualities of our UK construction activities, focused on public sector priorities and long term framework contracts; and the ongoing opportunities we have in the Middle East and other international markets.

Trading conditions remain favourable for our Facilities Management division and we continue to see opportunities coming to market for which we are well placed to bid. Mobilisation of the recent contract wins with the Home Office and the Foreign and Commonwealth Office is progressing well. As previously indicated, market conditions have remained challenging for our smallest division, Specialist Services, which represents c. 10 per cent of Group revenue and is expected to show a deterioration over the prior year performance. Cost reductions are being implemented in order to adjust capacity to meet reduced near-term demand.

Project Services' activity in the UK construction market remains solid, underpinned by long-term structural requirements for public-sector facilities such as schools, hospitals and prisons and for private-sector framework programmes. Work levels in each of our Middle Eastern markets - Qatar, Oman and the UAE - have continued to increase. There continue to be ample opportunities for Interserve in these markets, operating in long-established partnerships with a reputation for delivery and quality.

Equipment Services continues to make progress reflecting its diversified spread of international markets. Strong demand in the Middle East, improved performance in Australia and a growing presence in South Africa have offset more challenging conditions in Europe.

Contract Wins

Since the half year we have won a range of important contracts, notable amongst which were:

* the ‚£310 million Corsham communications centre PFI contract for the MoD; * the Thames Gateway Water Treatment Plant, worth ‚£200 million to our consortium; * four health-sector projects in Wales totalling over ‚£110 million; * a ‚£70 million contract with the Foreign and Commonwealth Office to provide facilities management services for its UK estate and 14 diplomatic missions in Europe over seven years; * a ‚£44 million PFI project to create two leisure centres for Leeds City Council, the first ever non-education PFI contract within the Building Schools for the Future programme; * a ‚£32 million extension to Forest Bank prison; * a ‚£30 million contract to design and build a new maternity ward and day surgery for Poole Hospital, Dorset; * and our consortium has been named preferred bidder for a ‚£300 million PFI contract to create and maintain a new acute hospital at Enniskillen, Northern Ireland.

These contracts add to a future workload that stood in excess of ‚£6 billion at the half year.

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 six months ended 30 June 2008. The Group retains a resilient balance sheet, with committed facilities in place of ‚£250 million, expiring in or after 2011.

Outlook

We have, over several years, structured a business which develops and supports key areas of social infrastructure. Our focus in these areas, which comprise nearly 90 per cent of our substantial future workload, offers relative resilience in the prevailing economic environment. This, together with the ongoing opportunities available in our Middle East markets, underpins our performance and prospects.

Chief Executive Adrian Ringrose and Group Finance Director Tim Jones will host a conference call for analysts and investors at 9.00am today; for details please contact Maitland on 020 7379 5151. An electronic copy of this Interim Management Statement is available to download from the Company's website, www.interserve.com.

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For further information please contact:

Adrian Ringrose, Chief Executive 0118 932 0123Tim Jones, Group Finance Director 0118 932 0123Elizabeth Morley / Tom Roberts 020 7379 5151Maitland

About Interserve

Interserve Plc (www.interserve.com) is a services, maintenance and building group operating in the public and private sectors in the UK and internationally. It offers advice, design, construction and maintenance services for buildings and infrastructure, runs the operational systems and back-office services that support them and provides 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 ‚£1.7 billion and a workforce of 50,000 people worldwide.