Contract wins boost growth in support services division but recent public sector contracts and equipment services remain challenging

Facilities management giant Interserve has said the business is performing in line with expectations so far in 2010 but that trading in its support services and equipment services remains challenging.

In an interim management statement released today covering the period from 1 January 2010 to date, the firms says revenues across its support services division continue to grow on the back of contract wins in the past 18 months.

However a number of the newer public sector contracts continue to suffer significant "mobilisation and transition costs".

Private sector facilities management contracts are progressing to plan, but in areas such as its access business conditions remain very competitive and these factors are affecting performance so far in 2010.

Trading in the firms equipment services division is significantly below last year when a number of major projects in the UAE helped deliver a record first half operating result.

The Middle East remains the largest regional market for this division, and the recent entry into Saudi Arabia is developing to plan.

Australasia is performing well, buoyed by activity in the mining market, but elsewhere market conditions remain tough.

On the project services side the group's associate businesses in the Middle East have maintained its strong performance into 2010, despite lower activity levels in Dubai.

The region's workload has risen from the year end, benefitting in particular from the award of around £150m of work in Qatar.

The UK business continues to perform well says the firm after a strong year end.

Looking forward the firm says it has a future workload in excess of £6bn, including the group's share of Middle East associates.