Interserve says work prospects good but M&A still on the menu

Interserve says work prospects good but M&A still on the menu Wed, Sep 03 11:11 AM EDT By Neil Maidment LONDON, Sept 3 (Reuters) - Support services and construction firm Interserve has a list of work prospects to support future growth but does not rule out opening its cheque book to add to recent acquisitions, its chief executive told Reuters. The British firm, whose work ranges from building airports and schools to cleaning London's underground and placing people in jobs, has spent around 400 million pounds ($659 million) on buying businesses in the past three years, boosting earnings. The latest was a 250 million pound deal for Rentokil's Initial arm in February, which has materially opened up the UK private sector market for the firm's facilities management unit. "I would say we've got firepower for investment," Interserve CEO Adrian Ringrose said in an interview. "I'm not signalling that we will, I think we've got a number of organic growth opportunities, but I think we are a business that has shown its propensity and its capability to grow inorganically as well. If it feels right strategically ... you should expect to see us make the odd acquisition." Analysts at Berenberg have said the company still has up to 150 million pounds to spend on deals that would broaden its product offering. "Within our current arrangements we have that sort of level of capacity but for the right thing to support growth we can go and get more," Ringrose said. The firm has signalled that margins across its support services, construction and equipment hire divisions are unlikely to grow for the foreseeable future, placing more emphasis on contract wins and any further acquisitions to deliver growth. Bolstered by Initial, Ringrose said he was upbeat about the firm's prospects to grow its share of private sector work such as cleaning and catering, while increasing services with existing customers and expanding in higher profile welfare, healthcare and justice sectors all offered big potential. Interserve wants to grow in care in the home services and is also one of a host of firms including Capita, Sodexo and MTC Amey bidding to win a portion of contracts worth 450 million pounds a year to run UK probation services. The probation contracts, which will be subject to a 25 percent market share cap for each bidder, are expected to be awarded in October with work due to start in early 2015. In August Interserve posted a 36 percent rise in first half pretax profit and said it had a future workload of up to 7.5 billion pounds, compared with 6.4 billion at the end of 2013. Shares in the firm, which operates in more than 40 countries but makes over 90 percent of its revenue in the UK, were trading at 662.5 pence at 1351 GMT on Wednesday, up 16 percent on a year ago, valuing the firm at almost 1 billion pounds. ($1 = 0.6074 British Pounds) (Editing by David Evans) ======================= Gulf's Topaz Energy gets $75 mln investment from Standard Chartered PE Wed, Aug 20 01:24 AM EDT DUBAI, Aug 20 (Reuters) - Oman's Renaissance Services said on Wednesday that its unit Topaz Energy and Marine had secured a $75 million investment from Standard Chartered Private Equity (SCPE). SCPE will inject the equity in return for a 9.8 percent stake in the business, Renaissance said in a statement to Oman's bourse. The funds will be used to expand Topaz's fleet and develop its business. The transaction is expected to close in the fourth quarter of this year, Renaissance added. Topaz, an oilfield services firm which operates 99 vessels around the world, pulled out of a $500 million London share flotation in 2011, citing volatile markets. (Reporting by Praveen Menon; Editing by Andrew Torchia) ======================== UPDATE 1-New contract wins boost Interserve as profit jumps Wed, Aug 06 04:11 AM EDT (Adds CEO, analyst comments, background, shares) By Li-mei Hoang LONDON, Aug 6 (Reuters) - British building services and construction company Interserve said a string of new contract wins augured well for the future as it posted a 36 percent rise in first-half profit. Chief Executive Adrian Ringrose said on Wednesday the group had secured future work worth up to 7.5 billion pounds ($12.7 billion), compared with 6.4 billion at the end of 2013. "These are strong results. We're pleased and it's continuing three years of consecutive growth," he told Reuters. "Underpinning it all, we're winning work. We have won about 2 billion pounds worth of contracts in the period, with a range of customers ... and looking forward, we think there is more to come," he added. The FTSE-250 company, whose services range from cleaning supermarkets to building shopping malls in the Middle East, said pretax profit for the six months to June 30 rose to 50.2 million pounds ($84.7 million) from 36.8 million a year earlier. Its shares, which have risen 88 percent over the past two years, were up 2.1 percent to 625 pence at 0810 GMT. "Interserve's numbers are a tad better than was expected we believe," said Whitman Howard analyst Stephen Rawlinson. "The price has faltered a little recently dipping to 611 pence and we expect that these numbers and the positive mid term outlook should see some of the perkiness restored to the price," he added. Interserve, which operates in more than 40 countries, also posted a 29 percent rise in first-half revenue to 1.4 billion pounds, and raised its dividend by 10 percent to 7.5 pence per share. Ringrose said the company's equipment business, which accounts for 18.5 percent of operating profit, had experienced an outstanding period after profit rose by 64 percent year on year, helped by an improvement in the UK construction market. Interserve's recent acquisition of facilities management business Initial from Rentokil earlier this year also helped to add 600 million to its order book. ($1 = 0.5930 British Pounds) (Reporting by Li-mei Hoang; Editing by Neil Maidment and Mark Potter) =================== Oman's Renaissance sells unit to UK Interserve for $46 million DUBAI Sun Jul 14, 2013 11:54am BST Interserve PLC IRV.L 661.50p -3.50-0.53% 09/04/2014 (Reuters) - Oman's Renaissance Services RSC.OM has sold its oilfield maintenance services unit Topaz Oil and Gas, based in the United Arab Emirates, to Interserve (IRV.L) for $46 million (30 million pounds), a bourse filing said on Sunday. The U.K.-based support services and construction group bought the business to expand its growth in the Middle East, the statement said. Interserve has previously made acquisitions in Oman and Qatar it added. "Interserve sees the Middle East oil and gas services sector as a key growth market and this acquisition establishes our presence in the UAE," Adrian Ringrose, Interserve's chief executive officer, said in the statement. Stephen Thomas, CEO of Renaissance Services, said the sale would allow the company to focus on its core businesses. In 2011, Renaissance pulled a $500 million initial public offering (IPO) of Topaz Energy in London, amid valuation concerns and growing regional unrest at the time. Topaz Oil and Gas is a unit of Topaz Energy and Marine. Renaissance shares ended Sunday 0.3 percent higher in thin trading on the Muscat bourse .MSI, taking year-to-date gains to 21.5 percent. The announcement came after the market closed. (Reporting by Rachna Uppal; Editing by William Hardy)