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Interserve shares dive on new profit warning | Interserve shares dive on new profit warning |
(about 1 hour later) | |
Shares in Interserve have plunged by almost 30% after the construction and support services company issued another profit warning after trading in the third quarter deteriorated. | |
The company added it might also breach its banking agreements. | The company added it might also breach its banking agreements. |
Interserve said operating profit in the second half would be about half that of last year. | Interserve said operating profit in the second half would be about half that of last year. |
It has also made an additional £35m provision for abandoning the energy-from-waste market. | |
That brought the total set aside for exiting such contracts to £195m. | |
Interserve's contract to build a recycling and renewable energy plant in Glasgow was terminated by Viridor in February following extensive delays. | |
The company's shares had already crashed by more than 50% last month after it issued a profit warning. | |
The latest fall means the stock has fallen by more than 80% this year, valuing Interserve at just over £90m. | |
The company employs about 80,000 people worldwide in 38 countries. | |
Debbie White, who started as chief executive on 1 September, said there was "considerable potential for business improvement across the company". | |
"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," she added. | "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," she added. |
Interserve's order book is worth £7.4bn and recent contract wins include the Work and Pensions and Transport departments as well as the Ministry of Justice and Durham University. | |
Despite the collapse in the shares, analysts at Liberum are optimistic about the company's prospects, rating Interserve as a "high risk buy". | |
"We believe that, like Serco and Mitie, thoughts will quickly turn to the recovery potential in the business," they said. | |
"Clearly there is financial risk. However, we believe that Interserve can muddle through without a debt-for-equity swap and it has assets to sell." |
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