Interserve buoyant on strong FM performance

16 November 2009

Interserve reports a strong cash position to improve its net debt position, according to an interim statement covering the period from 1 July to date.

The position is strong compared to 30 June, 2009, when net debt stood at £85.1m, the Interim Management Statement noted. “This reflects continued focus on reducing capital expenditure, primarily within the equipment services business, and an improved working capital position, including a favourable contribution from advance payments.

The services, maintenance and building group, said it has “committed facilities in place of £250m expiring in or after 2011, the group retains a resilient balance sheet”.

Trading is in line with the board’s expectations, with a particular strength in the group’s Middle East construction and equipment services businesses, combined with ongoing stability in the public and utilities sectors in the UK.

Demand for FM remains strong in the public and utilities sectors with a number of highly successful in wins in public sector outsourcing, the mobilisation of which has necessitated significant investment in operating costs and infrastructure, the written statement said.

The group has continued to develop its PFI portfolio since the end of June, reaching financial close on the Sandwell Building Schools for the Future (BSF) project. That contract increased the portfolio size to 34 contracts, of which 22 are operational.

Interserve has also announced that it has been awarded a place on the new £4bn Partnerships for Schools (PfS) national Contractors' Framework, covering the design and build of academies and other schools in England. Interserve has been selected for two regions, North and the Midlands, as well as London and the South.

PfS expects to be able to offer the successful contractors up to £500m of work for which to bid in the next five months of the framework. It will operate in tandem with the Academies Framework, which will remain in place until December 2010.