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Interserve construction turnover up 17% despite 'supply pressures'

Interserve is close to being a £1bn-turnover construction business in the UK after delivering substantial growth in 2014.

The firm’s UK construction turnover rose 17% to £970.7M (2013: £802.2M).

However, operating profit only climbed slightly to £15.4M (2013: £14.7M), reflecting a reduced margin of 1.6% (2014: 1.8%).

Interserve blamed this on “supply pressures”.

Its construction forward order book grew 39% to £1.4bn.

The Interserve group reported turnover of £2.91bn (2013: £2.19bn), an increase of 33%.

Profit before tax was down 9% to £61.9M from £68.1M, due to costs of £19.4M associated with two facilities management acquisitions.

Support services accounted for £1.8bn (2013: £1.25bn) of revenue, while equipment services – its RMD Kwikform business – reported £195.5M of turnover (2013: £169.6M).

“In our construction business we delivered good revenue growth in the UK. Whilst margins have been affected by supply pressures, they remain within our expected range. In the Middle East, the business has delivered a solid performance in challenging, albeit improving construction markets,” said Interserve.

“In construction, we expect to see further volume growth in the UK in 2015, much of which is visible in our future workload, although margins will likely remain close to current levels.

Chief executive Adrian Ringrose (pictured) added: “2014 was a landmark year for the business in which we advanced our strategy and delivered strong organic growth despite continuing challenging conditions in a number of our markets.

“Looking to the future, we are encouraged by the growth potential of the business. Our attractive positioning in our core markets and our ability to identify, invest in and deliver on attractive project and corporate opportunities is a powerful differentiator.”

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