WET News

26 Leaders 2015 Interserve sees supply pressures AMP transition proves a challenge Interserve ConstruCtIon Interserve House ruscombe Park, twyford reading Berkshire rG10 9Ju t: 0118 9320123 www.interserve.com J MurPHy & sons Hiview House, Highgate road London nW5 1tn t: 020 7267 4366 www.murphygroup.co.uk the LeADeRS 2015 Interserve Construction, part of the Interserve Group, delivered good revenue growth in the UK, while margins were as expected having been affected by supply pressures. Adrian Ringrose, In- terserve Group chief execu- tive, says of the division: "Against a backdrop of improving demand but also of increasing supply chain pressures, we performed well, growing revenue 21% to £970.7M. "This growth was boosted by a strong performance from Paragon, the London-based specialist fit-out and refurbishment business we acquired in 2013, and by our growing Energy from Waste (EfW) activities." He says the division's future workload grew 39% to £1.4bn, as it benefitted from targeting a mixture of new and existing frameworks, and from selective opportunities in the private sector. He says the group made further progress in the EfW (energy from waste) market, J Murphy's water business continues to operate at around the same level as in previous years despite the transition from AMP5 to AMP6 having been a challenging period. The company's business develop- ment manager, Steve Webber, adds that changes in customer procurement strategies has led to fewer framework opportunities and greater project-based procurement. This has delayed commitments and increased bidding costs. Webber explains: "More projects are procured through design and construct strategies and early engage- ment continues to be crucial. By collaborating with the client and consultants from the outset, we can clearly understand the customer's objectives to ensure that they are delivered cost effectively every time." Murphy has experienced entering into an agreement with Derby City and Derby- shire County Councils as part of a joint venture with Shanks. As part of the 27-year, £950M deal, the joint venture is to build and operate a new waste treatment facility in the city. Interserve's work with South West Water as part of the H5O alliance continues to March 2016. Projects being carried out by the alliance include a £3.5M upgrade to sewers and water overflow systems in Truro; an £18M programme of works to ensure the continued pressure on margins through projects won in an exception- ally competitive environment. These projects are now being completed, and the company sees significant opportunities across its core market sectors in the UK, Ireland, Australia and Canada. "We recognise that delivering AMP6 assets and objectives is still going to be challenging but we believe that with a truly collaborative approach, expectations will cleanliness of some of Britain's most popular beaches; and night works in North Devon timed to avoid disruption to the annual book festival and resulting tourist trade. In Construction, Ringrose expects to see further volume growth in the UK in 2015, much of which is visible in the division's future work- load. However, he says margins "will likely remain close to current levels". In the Middle East, he expects Interserve to make volume progress as it delivers contracted orders. be exceeded," says Webber. "...we are committed to supporting our water clients in their approach to totex and achieving best value. Murphy is fully engaged with the supply chain to facilitate innovation through collabora- tion; to drive efficiencies and reduce costs and time while delivering quality outcomes." Murphy's wins for AMP6 include the £170M upgrade of Deephams WwTW in a jv with Kier and AECOM. tHe nuMBers 2011 2012 2013 % CHanGe Sales £M 485.3 568.5 665.9 17 Gross profit £M 23.2 17.2 3.7 -78 Operating profit £M 26 17.2 7.5 -56 Pre-tax profit £M 26.4 21.9 34.7 58 Staff 2,979 3,471 3,951 14 Net assets £M 187.3 203.5 219.7 8 tHe ratIos 2011 2012 2013 % CHanGe Return on capital % 14.1 10.8 15.8 47 Gross margin % 4.8 3 0.6 -81 Operating margin % 5.4 3 1.1 -63 Net margin % 5.4 3.9 5.2 35 Sales/employee £K 162.9 163.8 168.5 3 tHe nuMBers 2011 2012 2013 % CHanGe Sales £M 733.8 721.5 770.7 7 Gross profit £M 49.2 43.9 51.8 18 Operating profit £M 9.5 7 11.4 63 Pre-tax profit £M 15.9 12.9 16.9 31 Staff 2,693 2,160 1,998 -8 Net assets £M 41.8 43.1 49.9 16 tHe ratIos 2011 2012 2013 % CHanGe Return on capital % 38 29.9 33.9 13 Gross margin % 6.7 6.1 6.7 10 Operating margin % 1.3 1 1.5 53 Net margin % 2.2 1.8 2.2 23 Sales/employee £K 272.5 334 385.7 15 Your Choice in Waterflow Control Wassergewinnung Speicher Bewässerung Kraftwerk Pumpwerk Wassergewinnung Speicher Bewässerung Talsperre Industrie Kraftwerk Klärwerk

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