A £6 million (€6.68 million) pre-tax loss for the first six months of 2018 has been reported by Interserve, compared to a profit of £24.9 million (€27.73 million) in the same period a year ago, although the company claimed its recovery plan was on track.
The UK-based multinational support services and construction company said it had seen a “robust financial performance”, with significant operating profit improvement compared to the second half of 2017, up £11.5 million (€12.80 million) to £40.1 million (€44.65 million).
It said its Fit for Growth programme was on target to deliver £15 million (€16.70 million) savings in 2018 with £8 million (€8.91 million) secured in the first half.
Interserve claimed that there was significant activity ongoing to achieve £40 to £50 million (€44.54 million to €55.68 million) annualised savings by 2020.
The agreed sale of the Haymarket development in Edinburgh, Scotland, for £49.1 million (€54.69 million), was said to have completed Interserve’s exit from the property development business, which it said would enable greater focus on its core activities.
Interserve said that net debt at June 2018 before recognition of deferred financing costs relating to the warrant issuance of £645.8 million (€719.18 million), was in line with the company’s expectations. It reported net debt of £614.3 million (€684.14 million), which it said was net of £31.5 million (€35.08 million) of deferred financing costs.
CEO Debbie White said, “The first half of 2018 was an important period for Interserve as the new management team took actions to bring stability to the business and agree the direction of the group’s future strategy.
“The Fit for Growth initiatives we are implementing are delivering material cost savings and will result in a simpler, more focused and more effective Interserve. The refinancing that we completed in April provides a firmer financial footing from which to execute these plans.”
She said there was now a strategy that provided a clear direction, “leveraging our areas of strength, where Interserve can provide compelling customer propositions, delivered with rigorous operational and financial discipline”.
White, who joined as CEO in September 2017, added that although there remained a significant amount of work to do, the group saw energy and momentum in the business, citing new contract wins secured in the first half of the year.
Interserve’s construction business includes provision of bespoke, turn-key solutions, carrying out out aspects of a project from financing, design, development and construction to after-care and facilities management. Falsework and formwork business RMD Kwikform is also a part of the Interserve group.