Proactiveinvestors United Kingdom Interserve https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Interserve RSS feed en Wed, 17 Jul 2019 05:34:36 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Grant Thornton to face probe into audits of failed contractor Interserve ]]> https://www.proactiveinvestors.co.uk/companies/news/218412/grant-thornton-to-face-probe-into-audits-of-failed-contractor-interserve-218412.html Grant Thornton is facing a probe into how it audited the accounts of failed contractor Interserve.

Accountancy industry regulator the Financial Reporting Council said it had opened the review into audits of Interserve’s 2015, 2016 and 2017 financial statements.

Grant Thornton is already being investigated by the FRC for its work for Patisserie Valerie over the same three years.

The cake and coffee chain collapsed into administration earlier this year after a £94mln overstatement of its assets.

Administration

Interserve went into a pre-pack administration in March when shareholders rejected a debt-for-equity swap that would have seen lenders own 95% of the business.

The contractor’s borrowers immediately took over the business following that decision.

That avoided a complete collapse of Interserve, which was the fate of fellow contractor Carillion early in 2018.

The FRC is investigating KPMG’s audits of Carillion over a period covering 2013 to 2017.

In March, the government announced it would replace the FRC after its effectiveness was heavily criticised in a review by Sir John Kingman.

A new body, the Audit, Reporting and Governance Authority, will have statutory powers to sanction firms and directors when companies fail.

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Thu, 11 Apr 2019 09:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218412/grant-thornton-to-face-probe-into-audits-of-failed-contractor-interserve-218412.html
<![CDATA[News - Interserve awarded £660mln in public contracts in lead up to collapse, says union ]]> https://www.proactiveinvestors.co.uk/companies/news/216630/interserve-awarded-660mln-in-public-contracts-in-lead-up-to-collapse-says-union-216630.html Outsourcer Interserve PLC (LON:IRV) was given £660mln worth of public contracts in the lead up to its collapse last week, the GMB union has claimed.

Interserve, one of the government’s largest contractors, was on Friday saved from administration by debtholders after shareholders voted against the company’s rescue deal.

READ: Interserve to enter administration after shareholders reject rescue plan

The debtholders – including banks Royal Bank of Scotland PLC (LON:RBS) and HSBC Holdings PLC (LON:HSBA) and hedge funds Cerberus, Angelo Gordon and Emerald Investment Partners —agreed to wipe £480mln of debt and inject £110m equity in exchange for taking over hundreds of Interserve’s smaller operating businesses.

The deal allowed the contractor to continue trading and about 69,000 employees worldwide to keep their jobs.

Carillion-style collapse 

GMB said Interserve was awarded public contracts worth hundreds of millions of pounds before entering administration despite announcing a slew of profit warnings.

Citing figures from data provider, Tussell, GMB said the largest contract handed to Interserve last year was a £66mln deal in July with the Foreign and Commonwealth Office to run facilities management services.

The union said the company was awarded a further £6mln in public contracts in December despite proposing a debt-for-equity rescue deal to address its debt pile of nearly £700mln – shareholders voted against this plan on Friday.

In total, Interserve had about £2bn in government contracts for providing public sector services, including cleaning and maintenance for schools, hospitals and railway stations, as well as work for the Ministry of Defence and the Armed Forces.

GMB said it mirrors what happened in the run-up to the collapse of rival contractor Carillion, which had £1.3mln of government contracts at the time.

Key Interserve suppliers face heavy financial losses 

Interserve’s key suppliers now face heavy financial losses as they could lose their contracts or not be paid for work carried out.

Its suppliers include about 200 companies that provide IT, HR and property management services to the group.

The suppliers will be told this week whether their services are still required.

Administrator, Ernst & Young, said unsecured creditors would join the queue for a £600,000 fund.

“The small proportion of suppliers affected will be unsecured creditors and will all rank equally,” it said.

Mitie, Serco and Sodex said to be considering bid for Interserve's support services arm 

Rival outsourcer Mitie Group PLC (LON:MTO) is understood to have approached EY to express interest in buying Interserve’s support services arm, according to Sky News.

Mitie’s chief executive Phil Bentley is said to be interested in a potential buyout worth between £100mln and £150mln for the business.

However, Interserve’s new owners are likely to value the unit at more than double that price given that it is the most profitable part of the group.

Serco Group PLC (LON:SRP) and Sodex are also understood to be considering a bid for Interserve’s support services business.

Interserve has been hit by its disastrous foray into energy from waste plants in the UK and payments disputes over a business providing training in the Middle East.

 

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Mon, 18 Mar 2019 09:08:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216630/interserve-awarded-660mln-in-public-contracts-in-lead-up-to-collapse-says-union-216630.html
<![CDATA[News - Interserve to enter administration after shareholders reject rescue plan ]]> https://www.proactiveinvestors.co.uk/companies/news/216570/interserve-to-enter-administration-after-shareholders-reject-rescue-plan-216570.html Interserve PLC (LON:INVP) is to enter into administration after shareholders voted against the outsourcer’s rescue plan at an emergency meeting on Friday.

The company said 59.38% of shareholders voted against the debt-for-equity swap deal, which would have seen about 95% of the business handed over to lenders. 

READ: Interserve's largest shareholder reportedly floats prospect of takeover bid ahead of rescue deal vote

US hedge fund Coltrane Asset Management, which holds a 27.7% stake in Interserve, was among those opposed to the deal.

Interserve said it would now apply to the High Court for the business to be placed into administration.

Ernst & Young – which is lined up to become the administrators of Interserve –is expected to apply for a pre-pack insolvency administration of the company.

This is an insolvency procedure under which a company arranges to sell its assets to a buyer before administrators are appointed.

This move would wipe out shareholders, giving full control of the business to lenders.

However, it would mean the company could continue trading and avoid the same fate as rival Carillion, which collapsed early last year with a massive debt pile.

Ahead of Friday’s vote, Sky News reported that Coltrane had written to EY to urge them against a pre-pack insolvency deal.

The investor demanded EY conduct a comprehensive marketing process for the firm and its assets while raising the possibility it would explore a takeover bid.

The construction, cleaning and catering contractor’s ill-fated move into creating energy from waste resulted in hefty losses and contributed to a net debt of £630mln.

Interserve is one of the government’s largest contractors. Its contracts with the government include cleaning and maintenance for schools, hospitals and railway stations, as well as work for the Ministry of Defence and the Armed Forces.

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Fri, 15 Mar 2019 13:36:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216570/interserve-to-enter-administration-after-shareholders-reject-rescue-plan-216570.html
<![CDATA[News - Struggling outsourcer Interserve faces crucial vote on rescue deal ]]> https://www.proactiveinvestors.co.uk/companies/news/216534/struggling-outsourcer-interserve-faces-crucial-vote-on-rescue-deal-216534.html Interserve PLC (LON:IRV) faces a crucial vote on Friday for a rescue package to prevent the struggling outsourcer from collapse.

The construction, cleaning and catering contractor has been trying to persuade shareholders to back a deal that would see lenders write off their debt in exchange for equity from retail investors.

The plan would hand about 95% of the business over to lenders.

READ: Interserve's largest shareholder reportedly floats prospect of takeover bid ahead of rescue deal vote

If shareholders reject the proposal, Interserve could apply for a pre-pack insolvency administration to avoid a collapse.

However, this would give lenders full control of the business.

Ahead of the vote, Interserve’s largest shareholder urged the company’s would-be administrators against a pre-pack insolvency deal.

US hedge fund Coltrane Asset Management, which holds a 27.7% stake in Interserve, demanded EY – which is lined up to become the administrators – conduct a comprehensive marketing process for the firm and its assets.

Coltrane also raised the prospect of a possible takeover bid for Interserve.

Interserve’s shares have plunged 88% over the past year.

The group's ill-fated move into creating energy from waste resulted in hefty losses and contributed to a massive net debt of £630mln.

Interserve is one of the government’s largest contractors and employs 45,000 people in the UK.  

Its contracts with the government include cleaning and maintenance for schools, hospitals and railway stations, as well as work for the Ministry of Defence and the Armed Forces.

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Fri, 15 Mar 2019 08:24:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216534/struggling-outsourcer-interserve-faces-crucial-vote-on-rescue-deal-216534.html
<![CDATA[News - Interserve's largest shareholder reportedly floats prospect of takeover bid ahead of rescue deal vote ]]> https://www.proactiveinvestors.co.uk/companies/news/216310/interserve-s-largest-shareholder-reportedly-floats-prospect-of-takeover-bid-ahead-of-rescue-deal-vote-216310.html Interserve PLC’s (LON:IRV) largest shareholder has reportedly raised the prospect of a possible takeover bid for the outsourcer ahead of a crucial vote on a rescue plan at the end of the week.

US hedge fund Coltrane Asset Management, which holds a 27.7% stake in Interserve, floated the prospect in a letter to the company’s would-be administrators EY, according to Sky News.

READ: Interserve and Kier in strife as collapse of rival Carillion continues to weigh on industry sentiment

Coltrane also urged EY against a pre-pack insolvency deal that would hand lenders control of the business.

It demanded EY conduct a comprehensive marketing process for Interserve and its assets.

Rescue deal

Shareholders will on Friday vote on a rescue deal that will see lenders write off their debt in exchange for equity from retail investors, who own about 30% of the business combined.

If approved, it would see existing shareholders own just 5% of Interserve.

Coltrane plans to vote against the debt restructuring without a substantial improvement to the existing plan but Interserve has the backing of several other major stakeholders.

The hedge fund has been in a long-running power struggle with Interserve’s board.

It wants to oust most of the company’s board members and has threatened to sue them over a “catastrophic” loss of market value.

Interserve’s shares have plunged 88% over the past year.

The construction, cleaning and catering contractor’s ill-fated move into creating energy from waste resulted in hefty losses and contributed to a massive net debt of £630mln.

Interserve is one of the government’s largest contractors. Its contracts with the government include cleaning and maintenance for schools, hospitals and railway stations, as well as work for the Ministry of Defence and the Armed Forces.

In afternoon trading, shares were down 5.3% to 13.4p. 

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Tue, 12 Mar 2019 15:10:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216310/interserve-s-largest-shareholder-reportedly-floats-prospect-of-takeover-bid-ahead-of-rescue-deal-vote-216310.html
<![CDATA[News - Interserve and Kier in strife as collapse of rival Carillion continues to weigh on industry sentiment ]]> https://www.proactiveinvestors.co.uk/companies/news/216194/interserve-and-kier-in-strife-as-collapse-of-rival-carillion-continues-to-weigh-on-industry-sentiment-216194.html Outsourcers Interserve PLC (LON:IRV) and Kier Group PLC (LON:KIE) are at risk of the same fate as collapsed rival Carillion as they struggle under the weight of heavy debts.

Interserve is urging shareholders to back a rescue deal in a vote on Friday or the company could face administration.

READ: Interserve’s confirms largest shareholder proposed new terms for its rescue restructuring but says its plan the only way forward

The construction, cleaning and catering contractor is trying to gain support for a proposal that would see lenders write off their debts in exchange for equity from retail investors.

The group’s ill-fated move into creating energy from waste resulted in hefty losses and contributed to a massive net debt of £630mln.

Interserve is one of the government’s largest contractors. Its contracts with the government include cleaning and maintenance for schools, hospitals and railway stations, as well as work for the Ministry of Defence and the Armed Forces.

Kier, which has contracts for major construction projects in Britain, including London’s Crossrail link, has also had a troublesome time of late. 

READ: Kier shares tank as it revises debt higher after disappointing rights issue

On Monday, the company disclosed an accounting error that pushed up its debt for 2018, just two months after its chief executive stepped down following a disappointing rights issue.

Kier said its debt for the year was £180.5mln, compared to the £130mln announced in January.

In January, the construction firm’s chief executive Haydn Mursell resigned after many shareholders refused to buy into a new issue of stock a month earlier.

Just 38% of the rights issue shares were taken up by shareholders,  leaving underwriters to pay out the bulk.

Kier said the rights issue was hit by the fact that bankers have cut their exposure to the industry after becoming more pessimistic following the collapse Carillion.  

In Monday lunchtime trading, shares in Kier were down 12.4% to 435.2p and Interserve shares dropped 8.2% to 13.4p.

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Mon, 11 Mar 2019 12:51:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216194/interserve-and-kier-in-strife-as-collapse-of-rival-carillion-continues-to-weigh-on-industry-sentiment-216194.html
<![CDATA[News - Interserve’s confirms largest shareholder proposed new terms for its rescue restructuring but says its plan the only way forward ]]> https://www.proactiveinvestors.co.uk/companies/news/215793/interserves-confirms-largest-shareholder-proposed-new-terms-for-its-rescue-restructuring-but-says-its-plan-the-only-way-forward-215793.html Interserve PLC’s (LON:IRV) saw its shares jump on Tuesday after the group confirmed that its biggest shareholder, Coltrane Asset Management has written to the struggling outsourcing group’s board to propose new terms for its rescue restructuring.

The US hedge fund – which has a 27% stake in Interserve - has attacked the company over its handling of the badly needed Deleveraging Plan l because it originally stripped existing shareholders of 97.5% of the firm, handing it to its lenders.

READ: Interserve sweetens terms of rescue package as it looks to win over angry shareholders

When Interserve suggested new terms last Wednesday, which only doubled residual shareholder value to 5%, Coltrane directors threatened to sue the group, calling it a "terrible" deal, newspapers reported.

Coltrane, which is owned by financier Mandeep Manku, has suggested a new deal, according to CityAM, which involves issuing at least £110mln of new Interserve shares, to be offered to shareholders pro rata and underwritten by the hedge fund.

The deal would also convert £435mln of the firm’s £631.2mln debt into equity, giving lenders 55% of the firm and existing shareholders 37.5%, assuming full take-up of shares, the newspaper said. Interserve’s deal currently offers lenders 95% of the firm for converting the same amount of debt into equity.

Coltrane also said it would offer the company a bridge facility of up to £75mln, essentially a short term loan, to help the company get its finances back on track, CityAM added.

Interserve remains open to considering any proposal

In a statement today, Interserve said it had reviewed the proposal it received from Coltrane on 4 March with its advisors. It pointed out that the Coltrane proposal requires the consent of the group’s lenders, bonding providers and Pension Trustee to be capable of implementation.

The group said its board has asked Coltrane for its consent to share the proposal with these parties and their advisors, but this request has been refused despite the fact that the key terms of their proposal have been made public by the US hedge fund group.

Interserve added: “The ability to obtain lender support for a materially different deal requiring lenders to take significantly larger write-offs, or provide ongoing support, in the short time frame available is therefore unknown.”

The company said its board remains open to considering any proposal “which provides liquidity and a deleveraging solution that is capable of implementation in the time frame available.”

“However,” it added, “the Board continues to recommend that shareholders vote in favour of the Deleveraging Plan, which is currently the only plan that is capable of implementation in order to provide sufficient liquidity, cash and bonding facilities to allow the Group to service short term obligations and secure a stable platform for the business.”

Critical time for Interserve

Glyn Barker, Interserve’s chairman of Interserve, commented: “This is a critical time for Interserve. The proposed Deleveraging Plan, recommended by the Board, is the result of a long period of intensive negotiation to align stakeholders behind a plan to strengthen the balance sheet and secure a strong future for the business.

“It is the only plan today that provides a certain future for Interserve, preserving some value for shareholders while securing jobs, pensions, and continuity of services. In the absence of any other plan that is capable of implementation, further uncertainty continues to risk an outcome in which there is no return to shareholders, including Coltrane, and considerable disruption to the business.”

Interserve’s chief executive Debbie White is due to hold meetings with the firm’s major shareholders in coming weeks in a bid to secure the 50% approval at a general meeting on 15 March that the rescue plan needs to go ahead.

If the debt-laden outsourcer cannot pass a plan, the firm has said it will go into a pre-pack administration which will be handled by EY.

In afternoon trading, Interserve shares were 12.1% higher at 17.71p, easing back from an earlier peak of 20.48p..

 -- Adds Interserve comment, updates share price --

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Tue, 05 Mar 2019 08:37:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215793/interserves-confirms-largest-shareholder-proposed-new-terms-for-its-rescue-restructuring-but-says-its-plan-the-only-way-forward-215793.html
<![CDATA[News - Interserve sweetens terms of rescue package as it looks to win over angry shareholders ]]> https://www.proactiveinvestors.co.uk/companies/news/215406/interserve-sweetens-terms-of-rescue-package-as-it-looks-to-win-over-angry-shareholders-215406.html Interserve PLC (LON:IRV) bosses have sweetened the terms of a rescue deal in a bid to end a stand-off between lenders and key shareholders.

The beleaguered contractor’s lenders, which include RBS and HSBC, have agreed to swap £485mln worth of debt for a 95% stake in the beleaguered contractor.

READ: US short seller throws spanner into Interserve’s rescue plans

That all but wipes out existing shareholders, but the 5% of the company they will be left with is better than the 2.5% they stood to receive under the initial deal.

The banks have also agreed to pump an extra £110mln into the business through a new three-year loan facility, as well as pledging to write off £1 of debt for every £9 converted to equity.

Rescue package in ‘best interests of all’

“The agreement of Deleveraging Plan terms with our lenders, bonding providers and Pension Trustee represents a significant milestone for Interserve,” said chief executive Debbie White.

“Implementation of the Deleveraging Plan is in the best interest of all our stakeholders. The plan provides new liquidity and creates a strong balance sheet, which, alongside our Fit-for-Growth programme, will provide us with a competitive financial structure to continue to improve the business and deliver on our long-term strategy.”

Interserve, which looks after government jobcentres and army bases, hopes the new offer will appease angry shareholders, including its largest investor – New York-based hedge fund Coltrane.

Shareholders to vote on 15 March

The £20mln company needs at least 50% of shareholders to approve the rescue deal at a meeting next month.

It has been forced to act after a third of investors, including Coltrane, fiercely opposed the first deal, putting Interserve’s recovery plan in jeopardy and risking a Carillion-style collapse.

Interserve’s shares have plunged by almost 90% over the past year after it racked up huge debts expanding into areas in which it had little expertise, such as waste-to-energy plants and probation services.

Interserve shares dropped another 11% to 18.4p on Wednesday morning.

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Wed, 27 Feb 2019 10:36:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215406/interserve-sweetens-terms-of-rescue-package-as-it-looks-to-win-over-angry-shareholders-215406.html
<![CDATA[News - US short-seller throws spanner into Interserve's rescue plans ]]> https://www.proactiveinvestors.co.uk/companies/news/214068/us-short-seller-throws-spanner-into-interserve-s-rescue-plans-214068.html Beleaguered contractor Interserve PLC’s (LON:IRV) plans to restructure its debts are seemingly under threat from a US bear fund.

Shares in the contractor rose strongly this morning as its lenders agreed to a huge debt-for-equity swap that sees existing shareholders stake diluted to just 2.5%.

Coltrane Asset Management, however,  requisitioned an EGM and called for the removal of eight directors.

READ: Interserve agrees key terms of rescue deal as it tries to avoid same fate as Carillion

Interserve’s restructuring plans will see the group’s debts reduce to £275mln from over £600mln through the issue of £480mln of new shares via a debt-for-equity swap and placing and open offer.

Another £350mln of debt is being shunted into RMD Kwiform (RMDK), a profitable part of the business that is now staying with the company having at one point seemed destined to be handed to Interserve’s lenders.

Following the rescue, Interserve will emerge with £60mln of net cash excluding the debt going to RMDK and a loan facility of £75mln provided by its current lenders.

Debbie White, Interserve's chief executive, said the refinancing was critical to the group’s survival.

“Agreeing the key commercial terms of the Deleveraging Plan with our lenders, bonding providers and Pension Trustee is a significant step forward in our plans to strengthen the balance sheet.

“This proposal has been achieved following a long period of intensive negotiation and has the support of our financial stakeholders and Government.” 

Shareholders still have to approve the deal, which has been further complicated by the call for an EGM by Coltrane.

The fund has a stake greater than 5% in Interserve, which is sufficient to call the meeting.

It also wants to appoint two of its own nominees to the board but Debbie White is not one of those under threat and the fund manager says it supports her remaining in the CEO position.

The US fund was a significant short seller of Carillion before the contractor went bust at the start of 2018 and has numerous short positions open in other UK-listed businesses.

These include automation group Blue Prism, DFS Furniture, technology group IQE and Pets at Home.

Interserve shares jumped 10% to 14.5p.

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Wed, 06 Feb 2019 09:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214068/us-short-seller-throws-spanner-into-interserve-s-rescue-plans-214068.html
<![CDATA[News - Interserve agrees key terms of rescue deal as it tries to avoid same fate as Carillion ]]> https://www.proactiveinvestors.co.uk/companies/news/211647/interserve-agrees-key-terms-of-rescue-deal-as-it-tries-to-avoid-same-fate-as-carillion-211647.html Interserve PLC (LON:IRV) has agreed on the key terms of a rescue deal with lenders after struggling under a £500mln debt pile.

The UK support services and construction firm said it is also considering placing its building materials business, RMD Kwikform, in a separate holding company owned by the lenders.

The rescue plan will see a large part of the outsourcer’s debt converted into new equity. Interserve has previously said it would seek to cut its debt to 1.5 times core earnings.

Chief executive Debbie White said the deal will provide the company with a strong balance sheet and “enable us to move forward with confidence and the ability to improve our business and deliver our long term strategy”.

A portion of new equity will be offered to shareholders and new investors through a public offering.  

But Interserve said “the implementation of the deleveraging plan is not conditional upon a successful public offering”.

Lenders have also agreed to defer a payment due under its debt facilities to April 30.

A final form of the plan to cut debt will be announced in early 2019.

Interserve revealed earlier this month that it was in rescue talks, which could give creditors control of the company, in an effort to avoid the same fate as collapsed outsourcer Carillion.

READ: Interserve says shareholders could see a “material dilution” from deleveraging plans

The group has been hit by a weak construction market and a debt mountain.  Carillion entered into liquidation in January for the same reasons. 

READ: Carillion collapse confirmed as firm takes steps to enter compulsory liquidation

Shares in Interserve gained 5.4% to 11.47p in morning trading. 

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Fri, 21 Dec 2018 08:36:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/211647/interserve-agrees-key-terms-of-rescue-deal-as-it-tries-to-avoid-same-fate-as-carillion-211647.html
<![CDATA[News - Interserve says shareholders could see a “material dilution” from deleveraging plans ]]> https://www.proactiveinvestors.co.uk/companies/news/210843/interserve-says-shareholders-could-see-a-material-dilution-from-deleveraging-plans-210843.html Interserve PLC (LON:IRV) has confirmed that its shareholders could see a “material dilution” from deleveraging plans the troubled infrastructure contractor is trying to agree with its lenders as it struggles with a £500mln debt mountain.

In a statement responding to recent press reports, the FTSE small cap firm - one of the UK's largest providers of public services – said that it is “engaged in constructive discussions” with its lenders.

READ: Interserve moves to reassure investors as ex-shareholder claims it ‘could be next Carillion’

Interserve said: “Although the form of the deleveraging plan remains to be finalised, it is likely to involve the conversion of a substantial proportion of the group's external borrowings into new equity, an element of which may be sold to existing shareholders and potentially other investors.”

The group continued: “If implemented in this form, the deleveraging plan could result in material dilution for current Interserve shareholders.”

Interserve said it intends to announce its finalised deleveraging plan, which would be subject to shareholder approval, in early 2019.

The group also said it continues to trade well and in line with its expectations for the year ending 31 December 2018.

CEO says "fundamentals of business remain strong"

Debbie White, Interserve’s commented: "Our discussions with our lenders are a positive step in the process that was agreed as part of the April refinancing. The Cabinet Office has also expressed full support for the work we are doing to implement our long-term recovery plan.”

She added: “The fundamentals of our business remain strong. The deleveraging plan will give Interserve a strong long-term capital structure and provide a solid foundation on which to build the future success of the Group."

Last month, Interserve moved to reassure investors after press reports earlier in the day suggested the construction and facilities management group could be “another Carillion”.

The company refuted the speculation and claiming that it remains on track to deliver a “significant operating profit improvement” this year.

It was responding to claims made by a large, unnamed former shareholder who told the BBC that he was “doubtful if the firm can survive” without a significant cash injection, which he wasn’t convinced would be forthcoming.

Shares plunge

In mid-morning trading, Interserve shares were down 54% at 11.18p, bouncing off an all-time low of 6.50p.

Neil Wilson, chief market analyst at Markets.com commented: “With more than £400mln in deleveraging for a company with a market cap of around £10mln, it’s fair to say existing shareholders face wipeout, but at least the business should struggle on. As argued previously, the company will likely survive but a major cash call was inevitable.”

 -- Adds share price, analyst comment --

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Mon, 10 Dec 2018 08:05:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/210843/interserve-says-shareholders-could-see-a-material-dilution-from-deleveraging-plans-210843.html
<![CDATA[News - Interserve's target price cut by Liberum on continued debt concerns ]]> https://www.proactiveinvestors.co.uk/companies/news/209836/interserve-s-target-price-cut-by-liberum-on-continued-debt-concerns-209836.html Interserve (LON:IRV) has had its target price cut by broker Liberum after the embattled outsourcer reported that its debt pile had grown in the last quarter and that its exit from the energy-from-waste sector was dragging on.

The support services and construction group on Friday said it expects its year-end net debt to be in the range of £625mln-£650mln – up from £614.3mln at the end of June when it guided to a full-year net debt of between £575mln-£600mln.

READ: Interserve to unveil debt reduction plan next year, energy from waste saga drags on

In a note to clients, analysts at Liberum increased their net debt forecast (net of £23mln discount) from £558mln to £618mln or £641mln gross of the discount.

“The energy from waste delay has resulted in a £7mln increase to net debt as a result of a penalty. There has also been an increase in receivables due to a weak collection on a Saudi education contract and at equipment rental,” Liberum analysts wrote, adding it is also worth remembering that Interserve has US$350mln of unhedged US private placement loans, which can put material pressure on the equity.

“We reduce our target price from 50p to 35p to reflect the higher debt but valuation is close to irrelevant given the financial risks,” the analysts added.

Interserve, which has been under severe pressure since the high profile collapse of Carillion, said it expected to make significant operating profit improvement in 2018.

The company, which has been hit by significant delays to a number of the energy from waste plants it is building in the UK, said construction of all the projects was now complete and are close to being handed over.

Analysts at Peel Hunt said ahead of a more detailed model review it anticipates maintaining its 2018 estimates for Interserve with a small reduction to 2019 forecasts.

Since Debbie White joined Interserve as CEO in September 2017 to turn the company around its share price has tumbled from around 170p to close to 35p today.

Interserve shares were 4.6% down at 33.38p in mid-morning trade.

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Fri, 23 Nov 2018 11:09:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/209836/interserve-s-target-price-cut-by-liberum-on-continued-debt-concerns-209836.html
<![CDATA[News - Interserve to unveil debt reduction plan next year, energy from waste saga drags on ]]> https://www.proactiveinvestors.co.uk/companies/news/209812/interserve-to-unveil-debt-reduction-plan-next-year-energy-from-waste-saga-drags-on-209812.html Interserve PLC (LON:IRV) said it would unveil new debt reduction plans next year after the embattled outsourcer reported disappointing performances at its construction and equipment units and said its exit from the energy-from-waste sector was dragging on.

The support services and construction group on Friday said it expects its year-end net debt to be in the range of £625mln-£650mln – up from £614.3mln at the end of June when it guided to full-year net debt of between £575mln-£600mln.

READ: Interserve moves to reassure investors as ex-shareholder claims it ‘could be next Carillion’

Interserve, which has been under severe pressure since the high profile collapse of Carillion, said it expected to make significant operating profit improvement in 2018.

The company, which has been hit by significant delays to a number of the energy from waste plants it is building in the UK, said construction of all the projects was now complete and are close to being handed over.

However, Intersrve said that risks to the programme remain and that the group encountered some additional delays in the third quarter.

The group continues to expect a net cash inflow in the second half following the receipt of certain milestone payments, although additional penalties resulting from these delays means that this inflow is expected to be less than anticipated at the half year at around £15mln.

Given these delays and penalties, the company now expects year-end net debt to be in the range of £625mln-£650mln.

Fit for growth?

Interserve said its fit for growth performance improvement plan remains on track to deliver £15mln of synergies in 2018 and £40-50mln in 2020.

Interserve, which earlier this year completed a refinancing to provide financial stability for the group, said it was looking at all options to deliver the “optimum capital structure for the business” to support its long-term, sustainable development.

This process includes options to bring new capital into the business and, as previously announced, progressing the disposal of non-core businesses, the company said.

In terms of trading, Interserve said it expects its UK construction arm to report a small loss in the second half and that its international construction unit had been hit by lower activity, particularly in Qatar.

Its equipment services business had a challenging first half following the completion of major project activity in 2017 and is expected to report a percentage decline in full year profits similar to the first half of 2018. It said its support services arm had performed well.

"The board remains focused on positioning the group for long-term, sustainable success. This means continuing the operational progress we are making to put legacy issues behind us, particularly in closing out and exiting the Energy from Waste business. It also means reducing debt and putting a strong long-term capital structure in place. To this end we will announce a deleveraging plan for the Group early in 2019,” said CEO Debbie White, who has

Since White joined Interserve in September 2017 to turn the company around its share price has tumbled from around 170p to close to 35p today.

In a note to clients, Liberum analysts said that in terms of raising further funds, they believe “everything is on the table" including the disposal of its equipment services business.

“The valuation of equipment will not have been helped by weak end markets and issues with collection. It will be hard to raise equity until there is greater clarity on energy from waste. The availability of credit is also getting harder, particularly for construction companies,” they said, adding that they struggle to see any scenario, which leaves much, or any value, for the current equity.

Interserve shares were 2.5% down at 34.14p in early trade.

- Adds detail, analyst comment, share price - 

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Fri, 23 Nov 2018 07:54:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/209812/interserve-to-unveil-debt-reduction-plan-next-year-energy-from-waste-saga-drags-on-209812.html
<![CDATA[News - Interserve moves to reassure investors as ex-shareholder claims it ‘could be next Carillion’ ]]> https://www.proactiveinvestors.co.uk/companies/news/209116/interserve-moves-to-reassure-investors-as-ex-shareholder-claims-it-could-be-next-carillion-209116.html Interserve PLC (LON:IRV) has moved to reassure investors after press reports earlier in the day suggested the construction and facilities management group could be “another Carillion”.

The company hit back on Tuesday afternoon, refuting the speculation and claiming that it remains on track to deliver a “significant operating profit improvement” this year.

READ: Interserve exits industrial contracting sector

It was responding to claims made by a large, unnamed former shareholder who told the BBC that he was “doubtful if the firm can survive” without a significant cash injection, which he wasn’t convinced would be forthcoming.

“We could be looking at another Carillion,” he said. “I don't see how they can raise the £500mln or so needed. The management team and its track record are not good enough to make a case for investing new money.”

Despite counterclaims from two other sources that fresh money would be secured and that Interserve was in no danger of going bankrupt, the share price plunged by more than 20% to 29.4p in morning trading.

The company’s response has helped to reverse some of that, with the stock changing hands for 38.6p not long after – a 1.9% loss for the day.

Problems for outsourcers

Still, only in 2014, those same shares were worth more than 700p, valuing the company at close to £1.2bn.

Interserve’s market cap is less than £70mln today, with the share price under pressure in recent years amid concerns over the prospects for outsourcers.

Intense competition has forced companies to underbid one another, leaving them with little room for movement when projects overran and costs rose more than expected, which they inevitably would.

Fears for the sector came to fruition earlier this year when Carillion, another outsourcer with a wealth of government contracts, collapsed.

Capita PLC (LON:CPI), G4S PLC (LON:GFS) and Serco Group PLC (LON:SRP) have all taken whacks as well over the past couple of years as the City tries to figure out which company could be next to wave the white flag.

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Tue, 13 Nov 2018 15:42:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/209116/interserve-moves-to-reassure-investors-as-ex-shareholder-claims-it-could-be-next-carillion-209116.html
<![CDATA[News - Interserve exits industrial contracting sector following disposal ]]> https://www.proactiveinvestors.co.uk/companies/news/206175/interserve-exits-industrial-contracting-sector-following-disposal-206175.html Interserve PLC (LON:IRV) said it had completed its exit from the industrial contracting sector after selling its infrastructure, industrial access and hard services business.

The embattled support services and construction firm sold the business, which specialises in the provision of scaffolding, insulation and painting services, to Engima Industrial Services for £3.6mln. The company said it could potentially earn a further £1mln from the deal if certain financing targets are met in 2018 and 2019.

READ: Interserve swings to first-half loss as it undergoes major restructuring

Interserve has been in trouble since it had to make a £195mln provision for an energy-from-waste contract last year where costs had over-run, leaving it in danger of breaching its financial covenants. It has since been on a cost-cutting drive and has been shedding non-core assets.

The company last year closed its power business, which specialises in maintaining power lines and poles, as part of its restructuring plan.

Debbie White, Interserve’s CEO said the sale was part of the group’s plan to “focus on core customer segments”.

Since White joined Interserve in September 2017 to turn the company around its share price has halved. Its shares were 1.7% up at 58.40p in early trade.

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Tue, 02 Oct 2018 08:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/206175/interserve-exits-industrial-contracting-sector-following-disposal-206175.html
<![CDATA[News - Interserve-led consortium secures contract win for £105mln Durham University project ]]> https://www.proactiveinvestors.co.uk/companies/news/203119/interserve-led-consortium-secures-contract-win-for-105mln-durham-university-project-203119.html A consortium led by construction and support services firm Interserve PLC (LON:IRV) has secured a contract for a £105mln project for Durham University.

The consortium, which also includes asset manager Equitix and student accommodation developer Campus Living Villages UK, was selected as the preferred bidder for the project in October but has now reached financial close on the deal.

READ: Interserve swings to first-half loss as it undergoes major restructuring

Under the contract, the consortium will design, build, finance and operate two new college facilities on a 51-year concession at Mount Oswald. The project will be the first new Durham University college to be founded in the city since 2006.

Interserve will be responsible for designing and building the college facilities. It will include 1,000-bed spaces, a new University hub building with 300-seat banquet hall, and sports and music facilities.

Interserve said work will begin “shortly” with the scheme due to be completed in 2020.

"We are delighted to have reached financial close on this project and look forward to starting on site imminently," Interserve’s chief executive Debbie White said.

"This project builds on our extensive experience in the further education sector and our strong 15-year relationship with Durham University." 

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Fri, 17 Aug 2018 07:56:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/203119/interserve-led-consortium-secures-contract-win-for-105mln-durham-university-project-203119.html
<![CDATA[News - Interserve cheap, but not cheap enough, says Liberum ]]> https://www.proactiveinvestors.co.uk/companies/news/202948/interserve-cheap-but-not-cheap-enough-says-liberum-202948.html Liberum has chopped its price target for Interserve PLC (LON:IRV) following the construction and support services group’s half-year results last week.

The £100mln company crashed into the red in the opening six months of 2018 as it carries out a major overhaul of its business, a process which has seen it exit non-core businesses and renegotiate onerous contracts.

Half-year loss

For the six months ended June 30, Interserve posted a pre-tax loss of £6.0mln, compared to a profit of £24.9mln in the year-ago period.

“There were crumbs of comfort at H1; EBIT was in line, the Energy for Waste guidance seemed on track and net debt was better,” read a note to clients.

“However, there are plenty of worries; EPS was hit by the higher interest charge and EfW could still surprise negatively. This is a highly leveraged and risky situation and a rights issue is needed, despite the prospect of disposals.”

The City broker kept its ‘hold’ recommendation in place but cut its price target to 63p from 90p.

Interserve shares dipped 1.1% to 61.9p in mid-morning trading.

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Wed, 15 Aug 2018 10:35:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202948/interserve-cheap-but-not-cheap-enough-says-liberum-202948.html
<![CDATA[News - Interserve swings to first-half loss as it undergoes major restructuring ]]> https://www.proactiveinvestors.co.uk/companies/news/202362/interserve-swings-to-first-half-loss-as-it-undergoes-major-restructuring-202362.html Interserve PLC (LON:IRV) crashed into the red in the first half as the construction and support services company carried out a major overhaul of the business.

The group posted a pre-tax loss before tax of £6.0mln for the first six months of the year, compared to a profit of £24.9mln last year.

Under its so-called ‘Fit for Growth’ transformation programme, the company has been exiting non-core businesses and renegotiating onerous contracts.

It exited business in property development, energy from waste (EfW) projects and activities in the London construction market. 

Debt balloons 

The company also refinanced its loan facilities in April, leading net debt to rise to £614mln from £502.6mln

READ: Interserve faces regulatory probe into energy from waste exit

As part of its restructuring, Interserve has reorganised the business to focus on segments of government and defence, the private sector, communities and citizen services.

Restructuring costs came to £10.8mln for the period but the company expects to deliver £15mln in savings this year. 

“We believe that the benefit of the actions taken in the first half underpin our unchanged full-year expectations, as we make further progress with the implementation of the group's strategy and the Fit for Growth transformation programme,” said chief executive Debbie White.

First half revenues drop 

Revenue in the first half fell to £1.49bn from £1.64bn as major infrastructure projects in the UK were not repeated and a trade blockade in Qatar delayed a number of contract awards and created supply pressures.

Interserve said the collapse of outsourcer Carillion earlier this year had a “significant impact” on the market, particularly in the way the UK government considers using suppliers.

“We are working closely with the Cabinet Office in evolving the way the sector engages with the UK government,” White said.

Shares fell 3.5% to 69p in late morning trading.

Liberum left its rating on the stock at 'hold' and target price at 72p.

"We still see significant upside, albeit arguably 20% less after the grant of the warrants to the banks," it said.

"However, we also see significant risks on 4 factors; earnings, EfW contracts, net debt and the plans to address the over-indebtedness of the business."

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Tue, 07 Aug 2018 09:16:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202362/interserve-swings-to-first-half-loss-as-it-undergoes-major-restructuring-202362.html
<![CDATA[News - Interserve faces regulatory probe into energy from waste exit ]]> https://www.proactiveinvestors.co.uk/companies/news/196818/interserve-faces-regulatory-probe-into-energy-from-waste-exit-196818.html Troubled contractor and outsource group Interserve PLC (LON:IRV) is facing a regulatory probe into how information on its exit from its energy-from-waste business was released.

Interserve has received a formal notice of referral to the Financial Conduct Authority’s enforcement division for its actions during the period 15 July 2016 to 20 February 2017.

READ: Liberum downgrades Interserve as risks start to outweigh rewards

Interserve announced the closure of its energy from waste business in August 2016 following a £70mln cost provision for a contract in Glasgow that had been flagged three months earlier.

Between July 2016 and February 2017 Interserve shares rose to 335p from 277p before crashing to 227p on the news the provision was being raised to £160mln.

Concerns that Interserve might follow fellow contractor Carillion into administration eased recently when it signed off on a £834mln refinancing package.

The contractor said it was co-operating fully with the FCA investigation.

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Fri, 11 May 2018 08:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196818/interserve-faces-regulatory-probe-into-energy-from-waste-exit-196818.html
<![CDATA[News - Liberum downgrades Interserve as risks start to outweigh rewards ]]> https://www.proactiveinvestors.co.uk/companies/news/196642/liberum-downgrades-interserve-as-risks-start-to-outweigh-rewards-196642.html Analysts at Liberum have downgraded Interserve PLC (LON:IRV) to Hold from Buy as it said the risks to equity were starting to outweigh any potential rewards.

In a note to clients, the broker said not much had been left for equity holders after the embattled construction and support services provider saw its losses soar in 2017 to £244mln from £94.1mln the year before after being hit with £300mln in impairment and one-off charges for poorly priced contracts.

READ: Interserve losses soar as new boss takes hard look at contracts

“We believe that management has saved the business, but has not left much for the equity. There are all sorts of nasties in the FY results; £25mln of fees, 20% warrants, a ratchet in the cost of debt and PIK notes” the broker said.

“Investments have fallen in value, de-leveraging is slow and the actuarial pension can still surprise negatively” Liberum added.

The broker concluded that in order to stabilise the company would have to conduct a rights issue, although with the current register, it would be more akin to an initial public offering.

Liberum also slashed its target price for the group in half to 90p from 180p to reflect the new risks, with concerns still swirling in the market that Interserve could follow the likes of Carillion into administration.

These concerns were eased slightly in April, after the firm signed a £830mln refinancing deal that included a £300mln cash and loans facility.

In lunchtime trading Wednesday, Interserve shares were up 0.4% at 86.3p.

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Wed, 09 May 2018 12:20:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196642/liberum-downgrades-interserve-as-risks-start-to-outweigh-rewards-196642.html
<![CDATA[News - Interserve losses soar as new boss takes hard look at contracts ]]> https://www.proactiveinvestors.co.uk/companies/news/196039/interserve-losses-soar-as-new-boss-takes-hard-look-at-contracts-196039.html Debbie White, Interserve PLC s (LON:IRV) new chief executive, took advantage of the refinancing last week to wipe the slate clean at the troubled outsourcer and contractor.

Losses soared to £244mln from £94.1mln even though revenues rose to £3.25bn (£3.24bn) as Interserve took another £300mln (£231mln) in impairment and one-off charges for poorly priced contracts.

Net debt rose to £503mln but fears the support services group might follow Carillion into administration were eased by the signing last Friday of an £830mln refinancing that included a £300mln cash and loans facility.

White has promised to cut costs and add £40-50mln to group operating profit by 2020, with £15mln to come through in 2018.

Operating profits halved to £75mln in 2017, with the performance of support services described as ‘extremely poor’ and construction ‘poor’.

A significant proportion of support services business consists of high volume and relatively low margin contracts, White added.

“Historic selection and pricing in this sector has not been as disciplined as it will be in the future and the contract provision and poor performance is reflective of this.”

Shares tumbled 12% to 94p.

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Mon, 30 Apr 2018 09:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196039/interserve-losses-soar-as-new-boss-takes-hard-look-at-contracts-196039.html
<![CDATA[News - Interserve signs refinancing deal with its lenders, bond providers, and pension scheme trustees ]]> https://www.proactiveinvestors.co.uk/companies/news/195984/interserve-signs-refinancing-deal-with-its-lenders-bond-providers-and-pension-scheme-trustees-195984.html Interserve PLC (LON:IRV) has signed a refinancing deal with its lenders, bond providers, and its pension scheme trustees, in a move to strengthen the construction services company’s cash balance.

Interserve, which warned in October that it may breach covenants, said the new lending will provide cash facilities of £196mln and bonding facilities of up to £94.5mln maturing in September 2021.

READ: Interserve shares slide as it seeks increased borrowing limit

The small cap outsourcing group said it will issue warrants to the providers of the cash and bonding facilities with the right to subscribe for new shares at 10p each.

If exercised that would provide the warrant holders with an interest of up to 20% in Interserve’s post-issue share capital.

In late afternoon trading, reflecting this potential dilution, Interserve shares were 5% lower at 105.7p/.

Outsourcing firms such as Interserve have been in focus since rival Carillion (LON:CLLN) entered collapsed in January under the weight of its debts after a series of profit warnings.

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Fri, 27 Apr 2018 15:41:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/195984/interserve-signs-refinancing-deal-with-its-lenders-bond-providers-and-pension-scheme-trustees-195984.html
<![CDATA[News - Interserve shares slide as it seeks increased borrowing limit amid expectations of “significant” write-downs ]]> https://www.proactiveinvestors.co.uk/companies/news/194730/interserve-shares-slide-as-it-seeks-increased-borrowing-limit-amid-expectations-of-significant-write-downs-194730.html Interserve PLC (LON:IRV) saw its share price slide in mid-morning trading Wednesday after saying it would seek shareholder approval to increase borrowing limits as it expects to record "significant balance sheet write-downs" in its 2017 annual results.

The support services and construction company said it had called a general meeting on April 27 to secure the approval and to ratify any existing breaches of its borrowing limit.

READ: Interserve slumps as government monitors its financial health after Carillion's collapse

The group has already secured the backing of two major shareholders Coltrane Asset Management LP and Farringdon Capital Management, who together own around 35% of the company shares, for the proposed limit raise.

The write-downs are expected to comprise an impairment of goodwill as well as several other non-underlying items, with the majority of the exceptional items being either non-cash or reflected in the company's year-end net debt guidance of £513mln provided in January, Interserve added.

The group also said it had secured agreement in principle from lenders on the major commercial terms of its proposed refinancing, which would see the company obtain £834mln in cash borrowing facilities until September 2021.

The refinancing is expected to be completed by the end of April 2018.

Interserve shares were down 2.5% at 81.3p.

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Wed, 11 Apr 2018 10:33:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/194730/interserve-shares-slide-as-it-seeks-increased-borrowing-limit-amid-expectations-of-significant-write-downs-194730.html
<![CDATA[News - Interserve slumps as government monitors its financial health after Carillion's collapse ]]> https://www.proactiveinvestors.co.uk/companies/news/190165/interserve-slumps-as-government-monitors-its-financial-health-after-carillion-s-collapse-190165.html Interserve PLC (LON:IRV) shares slumped today following news the government is monitoring the financial health of the contractor in the wake of the collapse of rival Carillion PLC (LON:CLLN).

Shares in the FTSE small cap firm were down 2.5%, or 3.1p at 117.9p in late afternoon trading.

The UK Cabinet Office has set up a team of officials to keep an eye on the outsourcer, which provides security, cleaning, healthcare and construction services, the Financial Times reported.

READ: Interserve shares tumble as it issues profit warning and says it could breach banking covenants

“Ministers are very worried about Interserve, but the team is small and low-key as they are not wanting to unsettle,” an unnamed official told the newspaper.

The company, which employs about 80,000 staff worldwide and 25,000 in the UK, issued multiple profit warnings last year. It blamed challenging market conditions in the UK construction division, large losses on a waste-to-energy project in Glasgow and an increase in the national minimum wage.

In January, shares recovered as it forecast better-than-expected operating profit for 2018 after delivering cost savings of about £15mln. At the time the group said it expects its net debt to peak in the first half of 2018, partly due to ongoing refinancing activity.

READ: Interserve forecasts better-than-expected 2018 operating profit due to lower costs Sector-wide concerns

Worries about the British construction industry have escalated since Carillion revealed on Monday that it had made an application to the High Court for a compulsory liquidation of the business.

Carillion said despite considerable efforts, discussions with lenders and the government to secure funding have not been successful. The group’s demise follows a string of profit warnings after losing money on big contracts and running up large debts.

In response to the report that the government has turned its attention to Interserve, a  Cabinet Office spokesperson told Sky News: "We monitor the financial health of all of our strategic suppliers, including Interserve.

"We are in regular discussions with all these companies regarding their financial position. We do not believe that any of our strategic suppliers are in a comparable position to Carillion."

Bibly carries on with Carillion contract

On the upside, shares in gas and electric services provider Bilby PLC (LON:BILB) gained 10.5% to 100p after telling investors it does not believe Carillion’s collapse will have a financial impact on its trading.

Bilby has two contracts with armed forces joint venture CarillionAmey to provide building and support services for three of Ministry of Defence regions.

Carillion has said joint venture partner Amey will continue to provide the services previously provided by CarillionAmey. Amey confirmed it is prepared to continue the service obligation of the joint venture’s contracts.

Gattaca expects minimal impact from Carillion collapse

Specialist engineering and technology  recruiter, Gattaca Plc (LON:GATC) saw its share rise 4.1% to 255p after saying it expects the impact of Carillion's liquidation on its balance sheet to be “minimal.”

Gattaca provides recruitment services to Carillion and its subsidiaries, mainly in the public sector.

“Whilst Gattaca has outstanding debts from the Carillion group, the vast majority of these are insured by a leading credit insurer and, at this time, we estimate our uninsured balance sheet exposure to be less than £100,000,” it said.

Gattaca receives an annual net fee income of £0.5mln under its deal with Carillion.

It said it was in discussions with Carillion counterparties to ascertain how it can continue to support related underlying projects to maintain its net fee income. 

 -- Updates share prices --

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Wed, 17 Jan 2018 09:41:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/190165/interserve-slumps-as-government-monitors-its-financial-health-after-carillion-s-collapse-190165.html
<![CDATA[News - Interserve forecasts better-than-expected 2018 operating profit due to lower costs ]]> https://www.proactiveinvestors.co.uk/companies/news/189788/interserve-forecasts-better-than-expected-2018-operating-profit-due-to-lower-costs-189788.html Interserve PC (LON:IRV), the construction and services company which issued multiple profit warnings last year, today forecast better-than-expected operating profit for 2018 due to lower costs.

In a year-end update, the FTSE small cap firm company said it was making good progress with its 'Fit for Growth' three-year initiative, focused on boosting efficiency and improving its company-wide procurement processes.

READ: Interserve shares tumble as it issues profit warning and says it could breach banking covenants

Interserve said it expects cost savings of at least £40mln to £50mln by 2020 from the plan, with 2018 savings estimated to be £15mln.

The firm said: “As a result of the 'Fit for Growth' initiatives, the Group's operating profit for 2018 is now expected to be ahead of current market expectations.”

It also added: “Overall 2017 trading performance before exceptional items is consistent with the trends outlined in the October market update and in-line with market expectations.”

The company, which is reviewing its contract portfolio and non-trading balance sheet items, also said that discussions with lenders over longer-term funding were progressing.

The group said it expects its net debt to peak in the first half of 2018, partly due to ongoing refinancing activity. It expects net debt at year-end 2017 to be about £513mln.

Providing a sound foundation

Debbie White, Interserve’s chief executive, said: "The new management team, and the Board, have been working to stabilise the business and provide a sound foundation to continue to serve our customers effectively, underpin our future growth and to restore shareholder value.

“This work has focused on managing the balance sheet, conducting a thorough assessment of the contract portfolio, and introducing new management disciplines, processes and cost controls under the 'Fit for Growth' programme."

In an initial note to clients, analysts at Liberum Capital called the firm’s upgrade “surprising” and reiterated a ‘buy’ rating on Interserve shares, raising their target price to 180p from 150p on a sum-of-the-parts basis.

In opening deals, Interserve shares were steady at 99.55p.

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Wed, 10 Jan 2018 08:14:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/189788/interserve-forecasts-better-than-expected-2018-operating-profit-due-to-lower-costs-189788.html
<![CDATA[News - Interserve gets DWP boost as another broker slashes forecasts ]]> https://www.proactiveinvestors.co.uk/companies/news/185940/interserve-gets-dwp-boost-as-another-broker-slashes-forecasts-185940.html Interserve PLC (LON:IRV) has renegotiated a private finance initiative deal worth £227mln with the Department of Works and Pensions .

The rare piece of good news, which came amid an otherwise gloomy period for the troubled contractor, lifted Interserve shares by 11%.

READ: Interserve shares tumble as it issues profit warning and says it could breach banking covenants

A warning over profits and a possible bank covenants breach had seen its share price halve a few days earlier.

Interserve will provide the DWP estate with mechanical, electrical, building maintenance and waste services to more than 700 UK buildings.

French group Sodexo is the prime contractor or ‘integrator’ and the contract is part of a shift by the DWP to property management supported by companies supplying specific services.

US broker JP Morgan, meanwhile, slashed its price target after the profit and covenants warning, though it does not expect Interserve to be broken up.

Cash is flowing out, £220-230mln this year so far, but JPM expects a rights issue and disposals to address this.

READ: Interserve confirms it is in talks with lenders after profit warning

“Underlying trading appears to have deteriorated sharply in Q3,” said the broker.

“This has been attributed to wage pressure and contract specific problems across UK Support Services and UK Construction, with other divisions stable.”

 “We cut numbers by c.25% at the operating profit level for both FY17e and FY18e.”

JPM’s price target also drops to 68p from 78p.

Shares rose 7p to 72.5p but have shed 80% of their value this year.

 

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Fri, 20 Oct 2017 09:32:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/185940/interserve-gets-dwp-boost-as-another-broker-slashes-forecasts-185940.html
<![CDATA[News - Interserve shares tumble as it issues profit warning and says it could breach banking covenants ]]> https://www.proactiveinvestors.co.uk/companies/news/185867/interserve-shares-tumble-as-it-issues-profit-warning-and-says-it-could-breach-banking-covenants-185867.html Support services and construction group Interserve PLC (LON:IRV) has warned that it could breach its banking covenants as it slashed its estimates for second half operating profit.

Interserve said it now expects operating profit in the second half to be about half the level reported in the same period year ago.

READ: Interserve confirms it is in talks with lenders after profit warning

Shares plunged 31.67% to 61.50p in morning trading.

Trading slowed in the third quarter with its UK support services business affected by employment cost pressures and margin deterioration.

Operating profit in UK construction also deteriorated due to challenging market conditions, cost pressures and operational delivery issues.

The group added that while it had made further progress on its energy from waste contracts, it experienced a “slippage” in the anticipated completion date on some contracts. It expects a further £35mln provision will be required, on top of the £160mln set aside in 2016.

Based on the new provision, the additional net cash outflow for the rest of the programme is expected to be £35mln, the company said in its trading update.

“Taking all of these factors into account, we now believe there is a realistic prospect that we will not meet the net debt to EBITDA test contained in our financial covenants for 31 December 2017,” the group said.

“As previously announced, we are engaged in constructive and ongoing discussions with our lenders.“

READ: Interserve rallies as it names new chief financial officer, days after warning on full-year revenue, earnings

Interserve is to launch a group-wide performance improvement plan, called Fit for Growth, to bring its margins up in line with industry norms.

It has also kicked off a contract review across its support services and construction businesses.

"Despite our challenges, Interserve has a strong client base and many strengths as an organisation and I believe there is considerable potential for business improvement across the company,” said chief executive Debbie White.

“My team will focus on improving our margin performance in UK support services and ensuring good contract selection in UK construction, while reducing our cost base across the company.”

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Thu, 19 Oct 2017 09:48:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/185867/interserve-shares-tumble-as-it-issues-profit-warning-and-says-it-could-breach-banking-covenants-185867.html
<![CDATA[News - Interserve confirms it is in talks with lenders after profit warning ]]> https://www.proactiveinvestors.co.uk/companies/news/185642/interserve-confirms-it-is-in-talks-with-lenders-after-profit-warning-185642.html Interserve PLC (LON:IRV) shares dropped after the construction and support services group confirmed it was in talks with its lenders in the wake of a profit warning.

The company said its lenders, including HSBC Holdings PLC (LON:HSBA) and Royal Bank of Scotland Group PLC (LON:RBS), hired EY as an adviser last week. 

"Work is underway to provide greater clarity on Interserve's current trading and energy from waste provision, provided in the 14 September update announcement," the company said.

The news follows Interserve’s September announcement that trading in July and August had been “disappointing” and the cost to exit its waste management business would “significantly exceed” the £160mln previously anticipated.

The group blamed economic uncertainty and weak government spending for the profit warning, which cut its market value by halve.

Sky News reported on Sunday that it was in discussions with its lenders amid mounting concerns about its financial state. Lenders have become increasingly worried about Interserve’s balance sheet despite saying it should be able operate within its banking covenants for this year, Sky News said, citing sources. 

Interserve confirmed that it was in “constructive and ongoing” talks with its lenders in a statement today, adding that it expects to provide an update in coming days.

The group’s contracts include managing the Salisbury Plain military training base for the Ministry of Defence, a construction project at Durham University and support for the UK armed forces in Cyprus, Gibraltar and the Falkland Islands.

Shares fell 4.29% to 106p around midday trading. 

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Mon, 16 Oct 2017 12:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/185642/interserve-confirms-it-is-in-talks-with-lenders-after-profit-warning-185642.html
<![CDATA[News - Interserve rallies as it names new chief financial officer, days after warning on full-year revenue, earnings ]]> https://www.proactiveinvestors.co.uk/companies/news/184130/interserve-rallies-as-it-names-new-chief-financial-officer-days-after-warning-on-full-year-revenue-earnings-184130.html Interserve PLC (LON:IRV) saw its shares rally this morning after it named Mark Whiteling as its chief financial officer, days after the support services and construction company cut its full-year revenue and earnings expectations.

In a statement, Interserve said Whiteling was previously deputy and interim chief executive and chief financial officer at Premier Farnell PLC prior to its take-over by Avnet, and has been finance director of Communisis PLC and group finance director of Tibbett and Britten.

READ: Interserve shares almost halve after it warns full-year outturn will be "significantly below previous expectations”

The small cap firm saw its shares nearly halve in value last Thursday after it lowered full-year guidance on due to "disappointing" trading in its domestic market in July and August.

In late afternoon trading today, Interserve shares were up over 23%, or 19.0p at 100.5p, helped as well by an upgrade in rating from broker Peel Hunt to ‘hold’ from ‘reduce’.

The company revealed in June that Tim Haywood had stepped down as its finance head.

The appointment is the latest by Interserve new chief executive  Debbie White, who only took over as Interserve’s boss on September 1.

White commented: “As we develop and execute the Group's strategy Mark's impressive wealth of leadership, financial and investor relations experience will be crucial in supporting the growth of our business and delivering value to our shareholders."

 -- Updates share price --

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Mon, 18 Sep 2017 09:08:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/184130/interserve-rallies-as-it-names-new-chief-financial-officer-days-after-warning-on-full-year-revenue-earnings-184130.html
<![CDATA[News - Commentator says Interserve profit warning should not have surprised ]]> https://www.proactiveinvestors.co.uk/companies/news/183996/commentator-says-interserve-profit-warning-should-not-have-surprised-183996.html The latest profit warning from support services and construction firm Interserve PLC (LON:IRV) seems to have spooked investors today, with the shares more than halving.

However, one commentator thinks that it really should not have been a surprise.

In a note today, Russ Mould, investment director at AJ Bell pointed out that a cursory glance at August’s interim results from the small cap firm would have given both investors and the group’s new boss, Debbie White “a clear indication of the risks and challenges that lay ahead”.

READ: Interserve shares almost halve after it warns full-year outturn will be "significantly below previous expectations”

Mould said: “The first red flag was the latest batch of (supposedly) ‘exceptional’ items, whose consistent presence in the (restated) profit and loss account suggests they are anything but that.”

“The second red flag,” he added, “was the creaky balance sheet. Net debt has mushroomed from £276mln to £388mln during the period and the company flagged that average net debt for the year would come to £475mln to £500mln (with a £45mln pension deficit on top of that).”

Meanwhile, the commentator continued: “The third was the use of impenetrable language.”

Company results should “provide clarity and help investors”

He pointed out that a company’s interim and full-year results “are there to provide clarity and help investors understand how executives are putting their money to use.”

But  Interserve’s interims were “packed with unintelligible commentary, particularly relating to the £154mln energy-to-waste project from which it was sacked by Viridor last year.”

Mould said: “Such fudging has done the company no good as today’s update acknowledges that, in addition to tougher-than-expected trading in support services and construction, it will now cost more than the expected £160mln already set aside to extricate itself from the energy-to-waste mess.”

The investment director thinks that, White – who only took over as Interserve’s boss on 1 September in the wake of 18 months’  of troubles for the firm has three immediate challenges: To tackle the company’s debt; draw a line under the energy-to-waste deal; and Improve transparency and clean up the accounts.

‘Strategic review’ may give the shares

He said:  “A ‘strategic review’ may give the shares a lift if investors like the sound of her plans, as fellow fallen support services stars such as Serco PLC (LON:SRP) and G4S PLC (LON:GFS) have managed to put themselves back on the road to redemption.”

“But,” Mould adder, “the woes of Capita PLC (LON:CPI), Carillion PLC (LON:CLLN) and others also show that the road is a long one and the combination of complex business models, thin operating margins and lofty debts (and therefore skinny interest cover) can prove a toxic one if anything starts to go wrong.”

In other comment, analysts at leading broker Numis Securities placed their recommendation and target price for Interserve ‘under review’  after the unscheduled profit warning, given the increased uncertainty in regards to outlook.

The broker’s analysts reduced their underlying 2017 and 2018 pre-tax profit forecasts for Interserve by 24%

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Thu, 14 Sep 2017 12:47:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/183996/commentator-says-interserve-profit-warning-should-not-have-surprised-183996.html
<![CDATA[News - Interserve shares almost halve after it warns full-year outturn will be "significantly below previous expectations” ]]> https://www.proactiveinvestors.co.uk/companies/news/183978/interserve-shares-almost-halve-after-it-warns-full-year-outturn-will-be-significantly-below-previous-expectations-183978.html Interserve PLC (LON:IRV) saw its shares almost halve this morning after the support services and construction group warned that it now believes “that the outturn for the year will be significantly below its previous expectations” and said the final costs of exiting its Energy from Waste business will be much higher than expected.

In a brief trading update, the small cap firm said trading in the UK in July and August was disappointing, particularly in support services, but also in its construction division, leading to its warning.

READ: Interserve on the back foot after posting steep fall in first half profits

The group added that further progress continues to be made on contracts within its exited Energy from Waste business.

However, Interserve said the anticipated timing and complexities of completion mean that the Board now considers it likely that the final costs will significantly exceed the £160mln currently provided.

The company said it continues to believe that the group will be able to operate within its banking covenants for the year ended 31 December 2017.

In reaction, in early morning trading, Interserve shares dropped 48%, or 73.75p to 78.5p.

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Thu, 14 Sep 2017 08:58:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/183978/interserve-shares-almost-halve-after-it-warns-full-year-outturn-will-be-significantly-below-previous-expectations-183978.html
<![CDATA[News - Interserve on the back foot after posting steep fall in first half profits ]]> https://www.proactiveinvestors.co.uk/companies/news/182189/interserve-on-the-back-foot-after-posting-steep-fall-in-first-half-profits-182189.html Interserve PLC (LON:IRV) shares slumped after the UK support services and construction firm posted a sharp decline in first half profits, blaming an increase in the UK minimum wage, restructuring costs and challenging markets.

Headline profit before tax in the six months to 30 June totalled £36.5mln, compared to £55.2mln in the same period a year earlier.

READ: Peel Hunt kicks Interserve while it is down

The support services division’s profits were affected by regulatory costs, including an increase in the National Minimum Wage in April, a hike in pension service charges, the Apprenticeship Levy and changes to the application of holiday pay.

Interserve said the construction arm was hurt by persistent challenging market conditions and an underperformance in operational delivery, which resulted in a small loss.  

Revenue was stable at £1.6bn from £1.63bn last year, reflecting delays in obtaining government contracts due to the UK general election and last year’s Brexit vote.

Net debt at the end of June was £387.5mln, up from £274.4mln in the year-ago period, and Interserve sees this reaching £400mln to £425mln at the end of 2017.

Chief executive Adrian Ringrose said the company expects the restructuring and cost reduction measures taken in recent months to benefit its support and construction businesses in the second half.

“Despite the increased political and macro-economic uncertainty following the UK's EU referendum and recent general election, our outlook for the current year remains unchanged,” he said.

The company said provisions taken for exiting the energy-from-waste sector remained appropriate, though “significant risks and uncertainties remain”. In February, it announced it expected to book a £160mln charge for its exit from the business.

Shares fell 4.03% to 214.25p in morning trading. 

"Energy-from-waste remains the key focal point and we believe the risk profile in this area is reducing, though rising net debt in 2017 associated with this may confuse the issue in the short term but should not be taken out of context," said Numis.

"Energy-from-waste aside, the group is operating in differing markets across all divisions but we believe management actions are taking effect in difficult areas while good performers will maintain their performance."

Numis maintained its 'buy' rating and target price of 395p.

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Wed, 09 Aug 2017 09:48:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/182189/interserve-on-the-back-foot-after-posting-steep-fall-in-first-half-profits-182189.html
<![CDATA[News - Peel Hunt kicks Interserve while it is down ]]> https://www.proactiveinvestors.co.uk/companies/news/174687/peel-hunt-kicks-interserve-while-it-is-down-174687.html With a debt burden 1.3 times the market capitalisation, Interserve PLC’s (LON:IRV) new boss will have a lot of repairs to do, Peel Hunt says.

Debbie White will replace Adrian Ringrose as chief executive on 1 September.

Given her support services/finance background – Peel Hunt declared itself impressed by her 13 years at French facilities management giant Sodexo – she might be tempted to radically refocus the group.

Read Interserve's shares fall as it swings to a full year loss and suspends dividend Read Interserve shares rubbished as costs of exiting its energy-from-waste business more than double

However, given the continuing risks from the Waste to Energy money pit plus the growing debt mountain, the window for proactive change is limited, the broker reckons.

On the other hand, ‘steady as she goes’ is not really an option, and the new boss needs to perform some drastic surgery to strengthen the balance sheet and position the construction and support services firm for higher quality earnings growth.

“Debbie’s inevitable strategic review must surely place Equipment Services back on the potential disposal roster and also give consideration to the positioning of the UK and Middle East Construction activities,” Peel Hunt postulates.

“The principal earnings/balance sheet risk still rests with the Energy from Waste contracts (principally Glasgow and Derby). The £160mln provision, still a “best estimate”, relies on certain recoveries and assumes the ‘process’ technologies will work,” Peel Hunt notes.

“We believe that it could be at least 12-18 months before any real clarity can be provided on the provision, but our experience would suggest that there is still a risk of material increases,” it added, as it moved from ‘hold’ to ‘reduce’.

The target price has been cut from 250p to 200p, some 24p below the current share price, which was down 4.3% following the downgrade.

“Following the suspension of the dividend, there is no yield support and realistically then little likelihood of any pay-out before 2019. Interserve remains a high risk investment proposition and the incoming CEO has some big decisions to make,” the broker opined.

“Too many risks for us,” it concluded.

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Mon, 13 Mar 2017 10:27:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/174687/peel-hunt-kicks-interserve-while-it-is-down-174687.html
<![CDATA[News - Interserve's shares fall as it swings to a full year loss and suspends dividend ]]> https://www.proactiveinvestors.co.uk/companies/news/173922/interserve-s-shares-fall-as-it-swings-to-a-full-year-loss-and-suspends-dividend-173922.html Interserve plc’s (LON:IRV) shares were under the cosh today after the support services and construction group swung to a full year pre-tax loss and suspended its dividend.

The company reported a loss before tax of £94.1mln in the year to 31 December 2016, compared to £79.5mln the previous year, reflecting costs of exiting its energy-from-waste business.

The group announced it was getting out of the business in August following contractual problems, cost over-runs and delays.

An exceptional charge of £160mln related to delays and performance issues on energy-from-waste contracts.

Last week Interserve said it was increasing its exceptional loss by £90mln, following a review of operational developments at the energy-from-waste business and an assessment of the impact of litigation related to a terminated contract in Glasgow.

Interserve has new banking facilities in place to address cash outflows from exited business.

As a result, the company did not propose a final dividend. The dividend will be suspended temporarily while the group reduces its debt and improves liquidity while continuing to invest in the core businesses.

Revenue still managed to rise slightly to £3.24bn from £3.20bn, as growth in international support services, construction and equipment services offset a decline in UK support.

UK support services revenue was affected by delays in procuring government contracts due to uncertainties around the 2015 General Election and Brexit.

“Despite the increased uncertainty following the UK's EU referendum, our outlook for the current year remains positive,” said chief executive Adrian Ringrose.

“This, together with our strong market positions and healthy future workload, underpins the board's confidence in our medium term prospects."

Ringrose last year announced he was stepping down from the board once a successor has been appointed. The company today said the succession plan was “well advanced” without providing further details.

Shares fell 1.27% to 233.75p in afternoon trading. 

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Tue, 28 Feb 2017 12:44:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/173922/interserve-s-shares-fall-as-it-swings-to-a-full-year-loss-and-suspends-dividend-173922.html
<![CDATA[News - Interserve shares rubbished as costs of exiting its energy-from-waste business more than double ]]> https://www.proactiveinvestors.co.uk/companies/news/173393/interserve-shares-rubbished-as-costs-of-exiting-its-energy-from-waste-business-more-than-double-173393.html Interserve PLC (LON:IRV) saw its shares rubbished today after the support services and construction group revealed the costs of exiting its energy-from-waste business will be more than double earlier forecasts.

The firm lost a quarter of its stock market value, dropping 86p to 249.25p as it raised the provision for the business to about £160mln from £70mln.

Interserve said it was getting out of the business in August, after it was affected by cost over-runs and delays.

The big hike followed a review of operational developments at the energy-from-waste business and an assessment of the impact of litigation related to a terminated contract in Glasgow.

But analysts at Liberum said even that “may not be enough”

In a note to clients, they said: “We can have no confidence the provision is adequate.”

Interserve also warned that it could be harder and take longer to get money back from third parties as its main gasification subcontractor, Energos, was in administration.

Problematic …

The Liberum analysts continued: “We struggle to see how this can be anything but problematic given the challenges around gasification and the insolvency of the sub-contractor.

“While construction may be substantially complete in 2017, the experience of Costain has demonstrated that issues on warranties can last well beyond construction completion.”

They concluded: “No equity raise and facility has been increased but does not offer much headroom.

“We leave numbers unchanged at this stage, but potential for higher interest costs and re-fi costs.

“No mention here of trading elsewhere, but we think it is challenging.”

Liberum cut its target price for Interserve to 230p from 270p and reiterated a ‘sell’ rating on the stock.

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Mon, 20 Feb 2017 11:19:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/173393/interserve-shares-rubbished-as-costs-of-exiting-its-energy-from-waste-business-more-than-double-173393.html
<![CDATA[News - Interserve hit by Glasgow waste contract problems ]]> https://www.proactiveinvestors.co.uk/companies/news/125640/interserve-hit-by-glasgow-waste-contract-problems-125640.html The outlook for its UK construction arm has been adversely hit by the state of a Glasgow waste contract, support services group Interserve (LON:IRV)  said on Friday, sending shares crashing.

Shares fell over 19% to 319p as the group said the issues related to the design, procurement and installation of the gasification plant, along with continuing challenges with the supply chain that will result in further cost overruns and delays.

"As a result the board anticipates a £70m exceptional contract provision to be taken in the first half of 2016, resulting in a similar level of cash outflow spread across 2016 and 2017.

"We will be pursuing every opportunity to mitigate this situation," the firm said.

Interserve inked the £146mln contract with Viridor to undertake the EPC of the Glasgow Recycling & Renewable Energy Centre.

Completion was originally scheduled for 2016.

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Fri, 06 May 2016 10:43:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/125640/interserve-hit-by-glasgow-waste-contract-problems-125640.html
<![CDATA[News - UPDATE- Interserve flags up lower construction margins ]]> https://www.proactiveinvestors.co.uk/companies/news/109897/update-interserve-flags-up-lower-construction-margins-109897.html --- updates share price, adds broker comment ---

Support services group Interserve (LON:IRV) flagged up lower construction margins and a potential rise in UK wage costs, knocking its shares.

Interserve said margins in UK construction fell short of its medium-term expectations due mainly to the impact of supply chain volatility and inflation.

It blamed pressures on contract close-outs in a tough contracting environment.

The group also expected the premium to the National Minimum Wage announced in July's UK Budget to hit margins in UK support services by £10mln-15mln in 2016.#

However it said that was expected to recede in the following few years as the change was priced in to relevant contracts.

Shares fell 25.5p to 600p. JP Morgan said it was reducing its earnings estimates for next year in light of the potential impact of the minimum wage rise on the group's support services division.

But the broker, which has an 'overweight' rating on Interserve, said it was leaving its earnings estimates for this financial year broadly unchanged.

"Despite the earnings reduction, we believe the shares remain undervalued," it said.

Interserve, which provides services ranging from cleaning trains to supplying probation services, said UK construction markets remained difficult.

But demand was strengthening and expansion in the line-up of future work was encouraging.

Future workload rose 11% in the 12 months to June to stand at a record £8.3bn.

The group won contracts with new and existing customers including London Underground, MTR Crossrail, KeolisAmey Docklands, B&Q, BS Stanford, BP Khazzan in Oman, RasGas in Qatar and the Dubai Aviation City Corporation in the United Arab Emirates.

Pre-tax profit rose 19% to £33.7mln on a 16% lift in revenue to £1.6bn. The group increased its interim dividend by 5% to 7.9p. 

Chief executive Adrian Ringrose said: "We have made good progress in the first half of the year in markets that offer both opportunities and challenges."

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Wed, 12 Aug 2015 15:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/109897/update-interserve-flags-up-lower-construction-margins-109897.html
<![CDATA[News - Interserve shares up on positive trading update ]]> https://www.proactiveinvestors.co.uk/companies/news/37895/interserve-shares-up-on-positive-trading-update-45301.html Shares in Interserve (LON:IRV) jumped three per cent today as the firm continues to develop its bid to become a front-line public services provider.

In 2012, the engineering group won new work worth more than £1 billion, it said in an update ahead of releasing interim results on August 15.

Only last month, the company revealed it had secured a £24 million contract with Northamptonshire County Council to build the new A43 Corby Link Road.

Today, chief executive Adrian Ringrose said: "Interserve is trading well, expanding our already strong client relationships.

"This is reflected in revenue growth and a healthy future workload. Additionally, we have executed our strategy through the acquisition of BEST, a public services business, and have unlocked further value from our PFI portfolio."

Looking ahead, the company said it expected trading for 2012 to be stable and in line with market expectations.

Its medium-term strategy remains focused on building strong core businesses, expanding internationally and capturing new opportunities, it added.

Interserve shares were up 3.40 pct to trade at 328.10 pence.

 

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Tue, 10 Jul 2012 12:21:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/37895/interserve-shares-up-on-positive-trading-update-45301.html
<![CDATA[News - Interserve wins £24m deal to build A43 Corby Link Road ]]> https://www.proactiveinvestors.co.uk/companies/news/37289/interserve-wins-24m-deal-to-build-a43-corby-link-road-44580.html

Civil engineering group Interserve (LON:IRV) has secured a £24 million contract with Northamptonshire County Council to build the new A43 Corby Link Road.

This project is expected to improve transport links between Corby and the A14, support the growth of Corby and relieve the A43 at Geddington of through-traffic.

This should result in a reduction of the number and severity of road accidents and provide a high quality route, said Interserve.

Site preparation works are under way, with the main contract due to start in July with the completion and opening expected in early 2014. Interserve will build around 6.5 kilometres of dual carriageway and three new bridges.

“The A43 Corby Link Road will benefit both the local community and through traffic,” said executive director of Interserve David Paterson.

“The project will showcase our expertise in major civil works and our commitment to delivering such extensive developments sustainably.

“Our major projects team will work with local suppliers to achieve this.”


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Mon, 25 Jun 2012 11:31:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/37289/interserve-wins-24m-deal-to-build-a43-corby-link-road-44580.html
<![CDATA[News - Interserve consortium is preferred bidder for new Alder Hey children's hospital; shares up ]]> https://www.proactiveinvestors.co.uk/companies/news/36261/interserve-consortium-is-preferred-bidder-for-new-alder-hey-childrens-hospital-shares-up-43334.html Shares in FTSE 250 construction group Interserve (LON:IRV) were up 2 per cent this morning as it updated investors about contract wins, including one at the new Alder Hey children's hospital in Liverpool.

The firm announced the financial close of a £150 million PFI deal with West Yorkshire police.

It also revealed a new contract for the new Alder Hey children’s hospital in Liverpool to provide facilities management worth £50 million.

In West Yorkshire, the deal is to design, build, finance and operate two new divisional headquarters along with custody suites, and a specialist operational training facility.

Its signing comes less than two months after the Interserve-led consortium was appointed preferred bidder.

At Alder Hey, the new hospital will be built next door to the current site. Once the building is constructed the existing Alder Hey will be demolished and turned into a replacement park, the firm said.

Interserve's consortium with John Laing and Laing O'Rourke has been named preferred bidder for the PFI contract by Alder Hey Children's NHS Foundation Trust.

The company will provide 20 per cent of the consortium's investment into the project.

The project is expected to achieve financial close in the winter this year and the official opening of the new hospital is planned for summer 2015.

As at 11am, Interserve shares were up 2.05 per cent, to change hands at 283.3 pence.

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Fri, 25 May 2012 11:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/36261/interserve-consortium-is-preferred-bidder-for-new-alder-hey-childrens-hospital-shares-up-43334.html
<![CDATA[News - Interserve wins new contracts worth £350 mln in challenging conditions ]]> https://www.proactiveinvestors.co.uk/companies/news/9645/interserve-wins-new-contracts-worth-350-mln-in-challenging-conditions-12080.html International building and maintenance group Interserve PLC (LSE: IRV) announced it won several new contracts worth more than £350 million. The FTSE250 company also updated investors ahead of its annual results, due in March. Interserve said it has enhanced its ability to manage successfully through difficult market conditions following the actions taken during 2009. Overall group performance is expected to be in line with the board's expectations.

The group's international construction and equipment services businesses and ongoing stability among British public and utilities sector is offsetting the challenges of the private sector in the UK. The latest contract awards demonstrate the company’s strength in these markets, it said.

In the Middle East, Interserve won contracts totalling £90 million. In Qatar it has been awarded a new five year contract to service Shell’s ‘gas-to-liquids’ facility in Ras Laffan, worth £30 million. Elsewhere in Qatar, the contractor will design and construct two energy centres to power a new ‘Education City’ outside Doha in a contract worth US$40 million. In Oman, Interserve will design and construct two buildings for Al Hosn Investments, for a combined value of £20 million.

The UK Ministry of Defence has extended its facilities management contract to service its sites in the Falkland Islands and Ascension Island, adding approximately £24 million.

Meanwhile in the UK public sector, Interserve won a contract from the Ministry of Justice to design and construct a young offenders institution in Leicestershire for £70 million. In West Yorkshire, the Airedale NHS trust awarded an £8 million contract for work on the Airedale General Hospital in Keighley. The group also sealed two separate construction contracts with the Yorkshire County Council and the East Midlands Property Alliance, with a combined value of £30 millin.

In the utilities sector Interserve won contracts from Thames Water and United Utilities worth £60 million and £70 million respectively.

In terms of its financial performance, the company achieved excellent cash generation through the year, due to early actions to reduce capital expenditure and by realising value from its PFI portfolio. Consequently net debt improved from the first half of the year. In the second half of 2009, Interserve said its funding position improved and it retains committed facilities of £250 million, which expire in or after 2011.

Looking ahead, the building contractor has a healthy future workload, with £1.7 billion in contracted work scheduled for 2010. As a result of this strong revenue visibility, the Board continues to believe it is well placed to deliver resilient near-term performance and sustain long-term growth.

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Tue, 12 Jan 2010 11:06:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/9645/interserve-wins-new-contracts-worth-350-mln-in-challenging-conditions-12080.html
<![CDATA[News - Interserve Begins Facilities Management Contract worth £200 Million for HSBC ]]> https://www.proactiveinvestors.co.uk/companies/news/8579/interserve-begins-facilities-management-contract-worth-200-million-for-hsbc-10801.html Services, maintenance and building group, Interserve (LSE: IRV) started servicing over 1,600 retail and 120 offices for the HSBC banking group today, following a new £200 million facilities management contract win. Investors have reacted strongly to the news as the FTSE250 support service group advanced almost 7% this morning.

Through its Redditch based service centre Interserve will provide a single point of contact for HSBC customers, the ‘Total facilities management package’ also includes utilities and site maintenance services. The initial contract runs for three years but may extend until December 2014.

According to HSBC the deal represents a further integration of its support services functions. The FTSE 250 support services company expects to manage over 200,000 telephone calls and up to 300,000 emails a year for the banking group.

The deal represents one of the largest contracts of its type in Britain. “The size of the contract, the number and variety of incumbent suppliers and the fact that we are going further with this client than anyone else has previously all add to the challenge”, Adrian Ringrose, Interserve's Chief Executive commented, “the complex preparations we have undertaken have laid the foundations for the improved service, reduced cost and enhanced business processes that HSBC needs."

Interserve said it has undertaken a complex handover in-line with employment regulations, including the transfer, of over 2,000 staff from a variety of incumbent suppliers and from HSBC itself.

In total Interserve will manage facilities over an area of 720,000m₂. Interserve's responsibilities include the delivery of services to the HSBC group headquarters in Canary Wharf and a total estate which includes ATM cash machines, retail branches, commercial centres, offices, data centres, sports, social facilities and training centres.

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Tue, 01 Dec 2009 09:26:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/8579/interserve-begins-facilities-management-contract-worth-200-million-for-hsbc-10801.html
<![CDATA[News - Interserve trading in-line, FinnCap keen on high dividend yield ]]> https://www.proactiveinvestors.co.uk/companies/news/8026/interserve-trading-in-line-finncap-keen-on-high-dividend-yield-10200.html UK listed maintenance and building service company, Interserve released its Interim Management Statement (‘IMS’) for the period since July. According to Interserve (LSE: IRV), it has benefitted from a ‘strong performance’ in its Middle-East operations and an ‘ongoing stability’ in the public and utilities sectors in the UK. Overall the company said that it is trading in-line with expectations.

Investors did not respond particularly well to the statement, shares in Interserve eased almost 1% lower this morning against the backdrop of a strong FTSE 350 performance. In a morning note to investors analysts at FinnCap said “investors seem reluctant to purchase shares because of the large Middle East exposure” and an above average pension fund deficit. However the stockbroker stated that the low rating and high yield “more than compensate” for investor concerns.
Strong cash flow during the period allowed Interserve to improve the group’s net debt position. The construction and maintenance contractor said it has continued to focus on reducing capital expenditure throughout the period.

In regards to its outlook going forward, Interserve said that it will continue to execute its strategy of developing and maintaining long-term client relationships to build a well-balanced business mix.

Throughout the period Interserve says it has continued to win significant new contracts, which have helped maintain the Group's future workload at the record £6.7 billion level reported at the half-year.

Also this morning, Interserve announced that it has been included on the new Partnerships for Schools (PfS) National Contractors' Framework. The PfS framework will allow Interserve to bid for contracts on proposed developments worth £4bn in contracts covering the design and building of Academies and other educational facilities throughout England.

Interserve have been included in both the Northern and Southern regional frameworks subsequently giving it two places among a total of 24 places awarded across the academies framework.

The initial stage of the bidding programme is to begin this month and continue through to March, with £500m worth of contracts up for grabs in the first five months, the framework is then expected to run for four years.

Interserve Chief Executive, Adrian Ringrose commented on the new framework and highlighted the company’s track record in the sector: "The National Contractors Framework represents an excellent opportunity to provide outstanding educational facilities across England. Interserve has a great deal of experience in planning and building schools at all levels and we look forward to working within the framework to create the kind of learning environments that will enable pupils to excel."

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Mon, 16 Nov 2009 09:59:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/8026/interserve-trading-in-line-finncap-keen-on-high-dividend-yield-10200.html
<![CDATA[News - Interserve lands two contracts worth £117 million ]]> https://www.proactiveinvestors.co.uk/companies/news/7063/interserve-lands-two-contracts-worth-117-million-9104.html Services, maintenance and building group and FTSE 250 constituent Interserve (AIM: IRV) has secured two deals from Sandwell College and Ducab HV worth a total £117 million.


The work on the 25,300 sq m (square metre) £77 million campus for Sandwell College has already begun following confirmation of funding by the Learning and Skills Council at the end of August with the construction set to be complete in 2011. The company has another project in Sandwell, being in early stages of construction in the £280 million Building Schools for the Future programme signed with the Metropolitan Borough Council in August.

 

Interserve simultaneously announced a £40 million contract to build a factory complex for the Ducab HV joint venture comprising Dubai Cable Company (DUCAB), Dubai Electricity and Water Authority (DEWA) and Abu Dhabi Electricity and Water Authority (ADWEA). The construction of the facilities, including offices, factory and utility buildings, will commence in November and conclude in approximately 12 months.


The company said the deal indicated “continued commitment to commercial growth in the region.”

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Wed, 14 Oct 2009 08:44:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/7063/interserve-lands-two-contracts-worth-117-million-9104.html
<![CDATA[News - Interserve reports higher profits, foresees robust performance ]]> https://www.proactiveinvestors.co.uk/companies/news/5341/interserve-reports-higher-profits-foresees-robust-performance-7177.html Maintenance and building group Interserve (LSE: IRV) said profits and revenues both grew strongly in the first half, while outlook for near-term performance was robust..


In its half-yearly report released today, Interserve said pre-tax profits were up 18.7% to £40 million on revenue of £951.2 million, a 4.1% year on year increase. Earnings per share upped 19.7% to 23.1p.


The company has also improved its financial position, slashing the net debt 26.3% to £85.1 million.
"The half-year was another period of growth and development for Interserve. Benefiting from our long-term strategy we increased profits, reduced net debt and secured further contract wins with a whole-life value in excess of £1 billion that provide improved forward revenue visibility. As a result, we remain confident in our prospects and expect to deliver robust near-term performance and sustain our long-term growth," said CEO Adrian Ringrose.


Interserve said it was operating in better conditions than private sector companies and was lifted by strong trading in the Middle East and a robust demand in the UK public sector.


The strong results led the company to up its interim dividend to 5.5p from 5.3p.


Interserve simultaneously announced it has been named as a delivery alliance partner in South West Water’s K5 framework programme. The company is expected to have a £100 million stake in the £590 million programme, which is subject to the ongoing price review by regulator Ofwat, which is expected to get wrapped up in November.


Interserve recently landed a contract worth in excess of £200 million from HSBC (LSE: HSBA) to manage over 1,600 retail and 80 office sites, including the banking group’s headquarters in Canary Wharf.


The company added almost 8% on the news on the London Stock Exchange this morning.

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Tue, 11 Aug 2009 09:54:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/5341/interserve-reports-higher-profits-foresees-robust-performance-7177.html
<![CDATA[News - Interserve named preferred bidder for HSBC £200 million facilities management contract ]]> https://www.proactiveinvestors.co.uk/companies/news/5163/interserve-named-preferred-bidder-for-hsbc-200-million-facilities-management-contract--6974.html Services, maintenance and building group Interserve PLC (LSE: IRV) said it has been named preferred bidder by HSBC Holdings PLC (LSE: HSBA) for a £200 million contract to provide facilities management (FM) services across the banking and financial services organisation's property portfolio in the UK.

The portfolio comprises over 1,600 retail and 80 office sites and includes buildings in Northern Ireland, the Channel Islands and the Isle of Man. It also covers HSBC's global headquarters in Canary Wharf, London, building on the relationship Interserve already has with HSBC through providing the security services there.

The contract, one of the largest of its kind in the UK, is expected to be signed in the autumn and will then run for three years with an option to extend thereafter for a further two, Interserve added.

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Fri, 31 Jul 2009 09:52:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/5163/interserve-named-preferred-bidder-for-hsbc-200-million-facilities-management-contract--6974.html
<![CDATA[News - Interserve named as partner in £400 mln Highway Agency contract ]]> https://www.proactiveinvestors.co.uk/companies/news/4407/interserve-named-as-partner-in-400-mln-highway-agency-contract-6068.html
The maximum value of the framework, which is for two years with a possible two-year extension and is shared with four other contractors, is £400 million over the four years.

The programme covers a large geographical area encompassing the counties of Bedfordshire, Berkshire, Buckinghamshire, Cambridgeshire, Essex, Hertfordshire, Hampshire, Kent, Norfolk, Oxfordshire, Suffolk, Surrey and Sussex and includes the option to work on the M25.

The contract involves projects of up to £10 million and includes maintenance and improvement works, road resurfacing and bridge maintenance. The framework agreement is also open for use by local highway authorities and other public sector clients.

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Wed, 10 Jun 2009 10:27:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/4407/interserve-named-as-partner-in-400-mln-highway-agency-contract-6068.html
<![CDATA[News - Interserve reaches financial close on £80 mln Northern Ireland school projects ]]> https://www.proactiveinvestors.co.uk/companies/news/4244/interserve-reaches-financial-close-on-80-mln-northern-ireland-school-projects-5878.html
The Down & Connor and De La Salle Schools projects involve the design, build, operation and maintenance of four schools in the province.

The Down & Connor project is for St MacNissi's Educational Trust and covers three schools: two primary schools in Carryduff and Portglenone and a grammar school in Knock. The project on behalf of the Trustees of the De La Salle Congregation will create a grammar school in Downpatrick.

O'Hare & McGovern will now begin construction, which will be staggered over two years. Once the schools are open Interserve will deliver facilities management services valued at an estimated £22 million in Down & Connor and £12 million in De La Salle over a period of 25 years. These services will include security, waste management, porterage, site maintenance and energy management.

Interserve will invest approximately £2 million and £1 million in the two projects respectively, representing 50 per cent of the equity and subordinated debt, it added.

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Mon, 01 Jun 2009 08:34:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/4244/interserve-reaches-financial-close-on-80-mln-northern-ireland-school-projects-5878.html
<![CDATA[News - Interserve wins £110 mln UK prison contract ]]> https://www.proactiveinvestors.co.uk/companies/news/4106/interserve-wins-110-mln-uk-prison-contract--5709.html
The new, 480-place training prison for young adult males is to be constructed to Category B security standards on underused land within the existing HMP Belmarsh perimeter wall. Construction is expected to be complete by the middle of 2010.

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Tue, 19 May 2009 08:45:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/4106/interserve-wins-110-mln-uk-prison-contract--5709.html
<![CDATA[News - Interserve wins £200 mln contracts in UK and Middle East ]]> https://www.proactiveinvestors.co.uk/companies/news/3326/interserve-wins-200-mln-contracts-in-uk-and-middle-east--4735.html
In the UK, it won facilities management contracts from Ealing Council and from Leeds Partnership NHS Foundation Trust, and it won two construction projects in Dubai: an extension to the Mall of the Emirates; and a multi-purpose hall for the Government Engineer's Office.

In Ealing, Interserve has been named preferred bidder to deliver a total facilities management contract for 10 years, worth £5 million a year for the core sites, with the potential to provide additional services to any of the borough's 91 schools which choose to opt in.

The contract in Leeds is through Equitix which, in a Private Finance Initiative (PFI) project, owns and operates seven sites in Leeds providing a range of mental health services. Interserve, which has been working with the Trust in other contracts since 1998, will
employ an additional 150 staff to supply and manage a number of services worth
in excess £50 million over a 19-year period.

The Middle East construction projects have been awarded to Khansaheb Civil Engineering, in which Interserve has a 45 percent stake. Khansaheb originally built the Mall of the Emirates. Owner Majid Al Futtaim has now commissioned a £50 million expansion project there. The multi-purpose hall being constructed for the Government Engineer's Office will cost approximately £50 million.

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Wed, 11 Mar 2009 12:16:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/3326/interserve-wins-200-mln-contracts-in-uk-and-middle-east--4735.html