Interserve provides rescue plan update

Interserve CEO Debbie White

Interserve’s ‘Fit for Growth’ turnaround programme is paying dividends as the firm said it expects that its 2018 operating profit will be ahead of current market expectations.

A three-year programme launched by the new management team in October 2017, ‘Fit for Growth’ is focused on increasing the group’s organisational efficiency, improving group-wide procurement processes and ensuring greater standardisation and simplification across the business.

Interserve said its management are confident that the cost savings and management actions identified will contribute at least £40-50 million to group operating profit by 2020, with the in-year impact in 2018 estimated to be £15m.



The firm has been suffering from problem waste-to-energy contracts and, following a series of profit warnings in which the Board admitted to “a realistic prospect” of the group breaching its financial covenants with lending banks, it secured additional short-term funding to ease off its immediate financial troubles last month until March 31 at least.

In order to establish a strong foundation from which the group can move forward, Interserve said its new management team has been engaged in a comprehensive review of the group’s contract portfolio and a thorough review of the group’s non-trading balance sheet items.

“This work is progressing well and the outcomes will be announced alongside a presentation of the group’s longer term strategy for value creation at the time of the group’s 2017 annual results presentation,” it added.

Chief executive Debbie White 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.”


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