Mark Whitehead 30 April 2018

Outsourcing giant Interserve the latest to hit problems

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.'

Skate parks are not the only fruit image

Skate parks are not the only fruit

On Go Skateboarding Day, Susannah Walker asks councils and their leisure and park departments to think differently about what facilities they provide for teenagers.
SIGN UP
For your free daily news bulletin
Highways jobs

Interim Head of Fostering

Tile Hill
Negotiable day rate
We are working with a local authority client in London who is looking for an Interim Head of Fostering, the local authority was last inspected as “... London (Central), London (Greater)
Recuriter: Tile Hill

Interim Head of Children in Care and Care Leavers

Tile Hill
Negotiable day rate
We are working with a local authority client in London who is looking for an Interim Head of Children in Care and Care Leavers, the local authority... London (Central), London (Greater)
Recuriter: Tile Hill

Head of Regeneration and Economy

City of York Council
£59,593 - £68,094
York is a wonderful place to live and work and it is quite rightly famous across the globe. York, North Yorkshire / Hybrid
Recuriter: City of York Council

Clinical Lead, North Essex

Essex County Council
Negotiable
Clinical Lead, North EssexPermanent, Full TimeUp to £57,869 per annumLocation
Recuriter: Essex County Council

Assistant Director Legal,&Governance/Monitoring Officer

Rochdale BC
£70,340 - £81,589
The Assistant Director role has breadth of responsibility beyond legal services incorporating Constitutional and Democratic Services Rochdale, Greater Manchester
Recuriter: Rochdale BC

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.