Interserve shares tumble 20%

Aaron Morby 9 months ago
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Shares in Interserve fell 20% on Thursday as fears grew about the performance of contractors on Government outsourcing contracts in the wake of Capita’s profit warning this week.

The fall wiped out the gains achieved over the last few months as new chief executive Debbie White worked to restore investor confidence with a cost-cutting plan, despite debt expected to approach £600m this year.

A year ago Interserve shares stood at 352p but have since slumped 75% after a series of fresh profit warnings to yesterday’s close of 86p.

This morning shares recovered 5% in early trading.

Jittery investors sold stocks despite Cabinet Office moves to reassure the markets that it was watching the firm carefully and Interserve was not facing a similar position as Carillion.

Three weeks ago White said negotiations with banks were progressing with a further statement about longer-term funding due to be delivered shortly, ahead of testing of the Interserve’s year-end covenant position, which has been deferred until 31 March.

 

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