UPDATE 1-Interserve says strong trading continues

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LONDON, May 14 (Reuters) - Building and maintenance firm Interserve (IRV.L: Quote, Profile, Research) said on Wednesday trading continued to be strong as it announced a new 65 million pound ($126 million) construction contract in Dubai.

The company said trading remained in line with its expectations, benefiting from a healthy pipeline of work in the private sector and ongoing UK government expenditure in prioritised sectors such as education, health and prisons.

Interserve reaffirmed that its Middle East markets are "buoyant" and continue to offer opportunities for further strong growth.

It announced that its UAE associate company Khasaheb Civil Engineering has been awarded a 140 million pound contract to build the infrastructure for a 4,000-home residential and commercial community in Dubai, of which Interserve's share is 65 million pounds.

"This is a significant contract for us and demonstrates the continued vibrancy of the construction market in the region," chief executive Adrian Ringrose said.

At the time of the full year results in March, Ringrose highlighted that contruction was a particularly buoyant area for the company, which also provides cleaning, security and building maintenance services.

Interserve's shares were up 1 percent at 488 pence by 0730 GMT, valuing the company at 606.9 million pounds.

The company said there had been no significant change in its financial position since the end of 2007 and added it had continued to win new contracts both in the UK and internationally.