Construction and facilities management group Interior Services Group has reduced operations in France and Germany, because of the economic downturn in the countries.
The firm has all but wound up the German business and cut its stake in the French operation, run with a local partner, from 50% to 20%. The group said no significant costs were incurred.

ISG executive chairman David King also pointed to cultural difficulties, especially in Germany. He said: "We spectacularly failed to do things as a local company serving German companies." He added that running the operation had also taken up too much management time.

The group, which is listed on the alternative investment market, experienced a slight drop in pre-tax profit, from £8.1m to £7.9m, for the year 30 June 2003. Turnover fell £4m to £402m for the period, partly a result of the slowdown in the London fit-out market.

King said it planned to become a major supplier in the PFI market. He said: "We are not targeting the big ticket items – we do not have the balance sheet to support it."