Waterman, the support services group, this week froze its annual dividend payout but said that an improving commercial sector would lead to increases in the future.

Waterman has recommended a final dividend of 4.9p for the year ended 30 June 2004, the same as the previous year.

Graham Hiscocks, finance director, said it would be inappropriate to raise the dividend at the moment.

He said: “This wasn’t really the time to push the dividend up, but we do have confidence that we will enhance it when our earnings have moved forward.”

Pre-tax profit for the year rose 5% to £2m. Bob Campbell, the managing director, said that its involvement on regeneration projects, including the Paradise Street in Liverpool, had offset the reduced volume of commercial work.

“We are involved in preplanning contracts for about 10 schemes in the City of London,” said Campbell, “so we are well placed to benefit from the recovery when it happens”.