Profits have risen by 4.6 per cent at support services and building firm Interserve but bosses said they were still waiting for an expected jump in austerity led outsourcing work.

Interserve, which has a giant engineering headquarters in West Bromwich, saw pre-tax profits rise by 4.7 per cent in the year to December 31, to £67.1 million.

That came after a marginal increase in turnover to £2.32 billion, while net debt was trimmed by almost 18 per cent to £44.2 million.

The group has expected to see a pick up in the marketplace as cutbacks lead to a rise in outsourcing work from the public sector.

Chief executive Adrian Ringrose said: “This was a good year for Interserve. We grew earnings, generated strong cash

flow and made good strategic progress in entering new markets.

“We made further excellent advances in increasing the margins in support services and are on track to reach our target for the division of five per cent by the end of 2013.

“Construction has done well both in the UK and internationally in a tough market where margin pressure and increased competition have had an effect. Equipment services is emerging from the bottom of the cycle in good shape, improving margins and making a good return on capital.

“We won over £2 billion of work during the year, expanding our future workload to £5.6 billion. We anticipate stable trading in 2012, with pressure on construction being balanced by further improvements in support services’ margins and recovery in equipment services.

“Looking further ahead, with good potential in our existing markets, expansion into new markets and our strong balance sheet, our medium-term growth prospects are strong.”

Interserve, whose services range from cleaning stores at Sainsbury’s to building shopping malls in the Middle East, said that despite “reasonable opportunities” it had yet to see the big shift in thinking towards outsourcing, particularly among local authorities, that many analysts had predicted would come from tough government austerity measures.