Interserve's pre-tax profit has fallen 31% to 拢27.3m for the first six months of the year, compared to the 拢40m posted for the same period a year ago.
Revenue was down fractionally at 拢945m (H1 2009: 拢951m).
The firm said its UK construction business is targeting new markets, including waste and retail, in response to shrinking workloads in its traditional markets such as education.
In its last full year results, .
Interserve's order book was also down for the first half of 2010, by 12%, at 拢5.7bn, compared to 拢6.5bn at the last year end. This comprises 拢4.5m of forward orders and 拢1.2bn relating to pipeline. The fall is due to 鈥渁 reduction in the estimated value of pipeline in light of recent discussions with UK public sector clients, amounting to 拢600m鈥�.
The firm secured 拢800m of new contract wins during the reporting period.
Interserve has cut its net debt to 拢53.1m (30 June 2010), compared to 拢85.1m a year ago.
The pension deficit rose slightly to 拢75.8m (31 December 2009: 拢68.6m).
Around half of the group's profits are currently derived from outside the UK
Operations
Interserve's construction business, Project Services, delivered revenue of 拢381m, down 6.3% from the 拢406m reported a year ago. However, its profit contribution was up to 拢23.5m from 拢18.1m.
In the UK, over half of construction activity is generated via PFI and long-term framework contracts. Its UK order book has remained broadly the same as the year-end position, at around 拢1.2bn.
The firm said it is 鈥渁ctively targeting new sectors, including waste and retail, to offset some of the potential shortfall in work from our traditional segments such as education and custodial鈥�.
It believes it is 鈥渨ell placed to participate in any replacement programme鈥� for the axed Building Schools for the Future scheme. , a project subsequently cancelled.
Interserve's Support Services division reported an increase in revenue to 拢538m, from 拢504m a year ago. Pre-tax profit climbed to 拢10.7m (H1 2009: 拢8.9m).
The group's Equipment Services business, RMD Kwikform, suffered a fall in revenue, which dipped to 拢68.4m from 拢80.4m, and profit, which plunged to 拢7.7m from 拢20.4m. Interserve said it "was not able to replace several large hire contracts that helped deliver a record 2009 result鈥�.
Outlook
Chief executive Adrian Ringrose said: "Trading in the half-year was in line with the Board's expectations. Project Services delivered an excellent result, Support Services is making good progress based on moving performance in several key public sector contracts to planned levels of profitability and Equipment Services, after an exceptional 2009, performed creditably in a challenging environment.
鈥淯ncertainties persist in our markets, but we remain confident that the second half will show a significant uplift on the first half and that we have a strong international platform from which to sustain long-term growth at attractive margins."
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