Interserve saw its 2010 revenues fall just 1.8% to £1,872.0m (2009: £1,906.8m). Pre-tax profits were down 39% to £54.1m (2009: £89.2m).
The Project Services division increased its operating profit by 19% to £48.6m on revenues down 10% to £740m.
Support Services increased profits by 23% to £27.2m on revenues up 8% to £1,094m.
Equipment Services profits fell 60% to £14.4m (2009: £35.9m) on revenues down 11% to £140m.
Chairman Lord Blackwell said: “Both Project Services and Support Services reported improved results, with the former benefiting from excellent execution of its significant contract portfolio and the latter responding well to internal actions to improve contract profitability in our outsourcing operations, the benefits of which will continue into 2011. However group headline pre-tax profit was lower than that achieved in 2009 as these improvements were offset by a downturn in our Equipment Services division which, as anticipated, faced cyclical weakness in most of its markets.”
Chief executive Adrian Ringrose said: "Interserve traded in line with expectations during challenging conditions in 2010, with an excellent performance from Project Services and the initial benefits of our margin enhancement programme in Support Services being offset by cyclical weakness in Equipment Services. We expect stable trading conditions overall in 2011.”
Regarding the proposed takeover of Mouchel, Lord Blackwell said that due diligence proceedings were progressing, but was cautious as to what the outcome would be.
He said: “On 25 February 2011 we announced that we had made an indicative proposal to acquire Mouchel and had entered into a co-operation agreement as preferred possible offeror. We believe that the proposed transaction has an attractive strategic rationale, creating an enlarged group that is a fully integrated market leader in consultancy and support services and combining the complementary range of services of the two companies. The making of an offer however remains subject, amongst other things, to the completion of satisfactory due diligence, which is progressing.
“We will proceed with an offer if we conclude that it is financially attractive to both sets of shareholders. In determining whether the transaction is attractive to Interserve we will be seeking to ensure that leverage for the enlarged group is maintained at acceptable levels and that the transaction is accretive to earnings within a reasonable timeframe, having taken account of synergies arising from the integration. Our financial discipline will also make it important to retain the capability to pay an attractive stream of dividend payments to shareholders, as well as making an attractive return on investment from the acquisition. A further announcement will be made when appropriate. There can be no certainty that any offer will be made or as to the terms of any offer which might be made.”
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