Infrastructure and facilities management group Interserve, built partly on the old Birmingham-based Douglas Construction business, yesterday turned in strong results.
The company, which still has extensive business and operations in the West Midlands, posted pretax profits up 15.7 per cent to £47.9 million in the year to the end of December. That came on revenues ahead four per cent to £1.16 billion.
Interserve employs 12,000 people worldwide including 300 at its project services division in Erdington and equipment services arm at Aldridge. Each year it serves 15 million healthy meals in schools, hospitals and prisons, has helped in the care of over 140,000 hospital patients, looks after over 10,000 Ministry of Defence buildings in the UK, has built 4,600 prison cells housing 5.5 per cent of the prison population, while over one million vehicles travel on roads and bridges that Interserve has either built or repaired.
Chief executive Adrian Ringrose said: "Key drivers were the growing trend towards public sector outsourcing in the UK together with an increased level of activity in our Middle Eastern businesses."
He said 77 per cent of revenue was generated from long-term client relationships, with the future workload, standing at £4.8 billion at the year end in line with 2004.
And there was a growing contribution from the firm's PFI portfolio.
Mr Ringrose said: "PFI Investments is a growing element of our overall business mix. Whilst our core strategic interest in PFI/PPP projects is as a significant channel to market for our Facilities Services and Project Services businesses, the investment opportunities associated with the project financial structures are attractive to the group.
"Demand for infrastructure projects delivered through public-private partnerships remains strong in the UK and our opportunity and bidding pipeline remains healthy, comprising over 40 projects in our chosen sectors.
"The downstream services activities associated with our PFI project investments represent over 60 per cent of our total future workload and provide the group with an excellent source of high visibility, high quality earnings flow."
Pretax profits from PFI investments grew 23 per cent to £3.2 million.
The performance of the Facilities Services division had been "excellent", with a 39 per cent increase in operating profit to £17.8 million.
Margins improved to 4.6 per cent from 3.9 per cent.
Significant developments during the year included a Telford & Wrekin Schools PFI project and construction of a 750-bed acute centre for the Dudley Group of Hospitals.
The division carried out operational and logistics support for the MoD on Ascension Island and the Falklands and work at Devonport Naval Base.
Industrial Services took a knock, with operating profit of £6.3 million, down from £10.1 million in 2004 on static revenues of £163.5 million.
That was the result of problems with old contracts and the need for better management and improved control systems.
The Environmental Services arm provided asbestos surveying, testing and remediation services to clients such as Thomas Cook, British Gas, Circle 33 Housing Group, and Nottingham City Council Project Services saw operating profits of £18.3 million, an increase of 21.2 per cent, completing a number of large contracts including Peterborough Prison, Morfa Stadium in Swansea and the Defence Sixth Form College near Loughborough.
Equipment Services saw operating profit grow by 40 per cent to £20.5 million on revenue of £107.2 million, an increase of 22 per cent.
Interserve shares have lagged the UK support services sector by 13 per cent over the past year amid concerns over the firm's pension deficit.