A further outsourcing company supplying local government is facing uncertainty as it revealed huge losses and a tumbling share price.
Shares in construction and support services giant Interserve today fell 13% after it announced pre-tax losses had grown to £244m from £91.1m a year earlier.
Its revenue remained fairly stable but its debt nearly doubled from £274m to £502.6m.
The company blamed the losses on 'margin pressure on contracts for the British government' and a £217m loss on a deal to build waste-to-energy plants.
The news follows the collapse in January of construction and services company Carillion with an estimated £7bn of liabilities and the announcement last week by outsourcing giant Capita of £513m losses and a major reorganisation to tackle £1.7b debt.
UK-based Interserve operates in more than 40 countries worldwide and lists local government among the sectors it serves.
Earlier this month York City Council terminated a £9m project with the company to redevelop its historic Guildhall saying its cost estimates were too high.
Last October Interserve announced a transformation plan to save £15m this year which included an estimated 1,500 job losses.
Interserve chairman Glynn Barker (pictured) today admitted the group’s financial performance was 'extremely poor'.
He said many of the company’s problems were 'self-inflicted mistakes of the past' with 'inadequate financial and operating discipline'.
He added: 'The resulting stress and uncertainty have led to anxiety amongst our staff, suppliers and customers and significant loss of value for our shareholders from the fall in our share price.'
