Interserve has reported "mixed" trading in the first half of the year as its UK Construction business made a £2 million net loss.

In its results for the six months to June 30, the Group reported UK Construction profit declined from £4.5m last year on turnover up to £536.2m from £468.3m.

The firm said: "The continuation of a long period of challenging market conditions, coupled with areas of underperformance in operational delivery on a small number of contracts, resulted in a £2.0 million net loss for the UK Construction business."

In response, the company said it has made "further management, systems, procedural and other organisational changes across the division" to enhance its "financial and commercial controls and reporting".

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"The substantial majority of our UK Construction activity is now focused on projects with an average value of less than £10 million, constructing a range of buildings and infrastructure, plus selective larger contracts within our core competences, such as the Defence National Rehabilitation Centre, which is progressing well," the company stated.

Chief Executive Adrian Ringrose said: "Trading in the first half of the year was mixed. In the UK, Support Services delivered robust volume but margins were impacted by a number of anticipated cost headwinds, while in Construction the continuation of a long period of challenging market conditions, coupled with areas of underperformance in operational delivery, resulted in a small loss for the division.

"We expect the restructuring and cost reduction measures we have taken in recent months to benefit both divisions' performance during the second half of the year."

(LM)