Sturdy half-time figures and a record order book bode well for cash-rich construction services counter Interior Services, which continues to expand outwards from its London heartland.

ISG’s traditional business is London office fit-out work, for clients in the last year such as Shell, BP and UBS. This focus has recently been extended to cover refurbishment, with recent developments including the Royal Festival Hall; new-build, where a recent project was the Lawn Tennis Association’s new home; and regional retail fit-out for clients such as T-Mobile, Argos and Primark.

Regional UK businesses have been developed by acquisition and are flourishing too. Overseas operations were enhanced by the October purchase of ISG Asia, which ISG helped set up and in which it had maintained a 20% stake. Focused on Japan, China, Hong Kong, the UAE, Singapore, Malaysia and Korea, this arm has enormous potential.

For the six months to December, profits before tax and goodwill came in 16.6% higher at �4.2m, as fee income rose 35% to �48.1m. Like-for-like sales were up 11% in the regions, up 22% in retail and up 35% overall.

The market is very active and still growing, so the second half may well beat the first. Further ahead, London’s ongoing buoyancy looks assured as it becomes an ever more important financial centre – ‘and that’s not even taking into account the impact of the Olympics’, stressed chief executive David Lawther. Although still growing organically – the forward order book has advanced from �778m to �845m – ISG has more than �38m of cash in the bank and has acquisitions at home and in Asia on the mind.

House broker Panmure forecasts �10.5m profit for the full year, for 26.77p earnings. Recommended by Growth Company Investor at 326.5p in 2002, the shares are worth holding on to.

Interior Services	AIM	�87.86m	318.50p	0.00p
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