Interserve profits drop, debt increases


Interserve shares fell on the back of half year results.

The company posted a £6m pre-tax loss versus profit of £24.9m the prior year. Total revenue fell almost 10% to £1488.3. Reported operating profit fell 29% to £40.1m.

Net debt climbed 22% to £614.3m. In 2016, net debt stood at £390m.

Shares dropped by 12% in early trading, though had largely recovered by 9.30am.

The firm’s UK support services business makes the largest contribution to turnover and profit. UK support services revenue fell slightly, but margin dropped from 3.2% to 2.7%, which saw operating profit fall 19% to £21.6m.

However, Interserve said large FM contracts mobilised in the first half of this year are not yet reflected in results.

These include FM contracts with the Department for Work and Pensions (DWP) and Department for Transport (DfT).

It pointed to other wins such as the £35m Barking, Havering & Redbridge University Hospitals NHS Trust contract; the £10 million contract with Southwark Council and a £67 million FM contract with the Foreign and Commonwealth Office as reasons for optimism.

The firm recently cut a further 470 jobs and said its cost cutting drive, begun last year, should deliver £15m in savings to the group this financial year.

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