Interserve to roll-out £650m debt reduction plan

Aaron Morby 5 years ago
Share

Interserve chief Debbie White has pledged to unveil plans to tackle the group’s mountain of debt early next year.

The plan is expected to include a debt for equity swap or rights issue, although the latter would be a challenge after recent share price falls to their lowest point since 1984.

In a trading statement covering third quarter performance this morning, the troubled contractor said its expected year-end net debt to be worse than expected, up to £625m-£650m.

This deepened due to additional cash outflows on Energy from Waste as well slow payments in certain Middle Eastern markets.

Shares fell a further 8% to 32p in early trading.

White warned that the construction division would report a loss in the second half and that profits at the RMD Kwikform business, within the equipment services division, would be down due to delays in major infrastructure projects.

Despite these set-backs, she said Interserve would deliver a significant improvement in operating profit at year end and the Fit for Growth programme remained on track to deliver its target of £15m savings in 2018.

“Following the successful completion of the refinancing in April, the business has traded robustly in some challenging markets and continued to win significant new contracts,” she said.

“The ‘Fit for Growth’ programme is delivering material cost savings and a simpler and more effective business structure. Overall we remain on track to deliver a significantly improved financial performance this year in line with our plan.

“The board remains focused on positioning the group for long-term, sustainable success.”

White said that this meant closing out and exiting the Energy from Waste business and reducing debt and putting a strong long-term capital structure in place.

She added: “To this end we will announce a deleveraging plan for the group early in 2019.”

The board is working with its advisers to look at all options to deliver the optimum capital structure for the business.

This process includes options to bring new capital into the business and progressing the disposal of non-core businesses, she said.

 

Latest news

Quartet win £490m North West & Central railway works deal

Skanska, Kier, Octavius Infrastructure and Story Contracting bag major projects deal
2 hours ago

Council finds extra £33m for Buckinghamshire link road

South East Aylesbury Link Road costs soar by nearly 30% to £147m
1 hour ago

Site labour rates start rising again

Industry's biggest payroll firm says "it feels like things could be turning round"
2 hours ago

Galliford Try names new finance director

Rentokil's Kris Hampson joins contractor to replace Andrew Duxbury
3 hours ago

Hydrogen-fuelled diggers to be allowed onto highways

Government to raise barrier to widespread use of hydrogen fuelled plant in construction
18 hours ago

Council boss hits out at bat threat to £274m road job

Natural England could scupper scheme due to be built by Ferrovial
3 hours ago

Unite Students plans first major mixed-use scheme

Developer's first mixed BTR and PBSA project to be built in Edinburgh
17 hours ago

Plans in for £118m Government hub in Darlington

Work pencilled to start later this year on new home for 1,450 civil servants
18 hours ago

New contractor highlights Henry Construction jobs on website

New firm lists jobs by failed contractor to show its experience
1 day ago

Contractors line up for £2.6bn Anglian Water AMP8 deal

Eight big names land places on pioneering @one Alliance
2 days ago

McAleer & Rushe bags first major later living project

Work to start this month on 167-flat Royal Tunbridge Wells project
1 day ago

Kier starts first all-electric prison houseblock job in Kent

Next-generation fully electric T60 prison houseblock to be built at HMP Elmley
1 day ago

Keepmoat sees better times ahead in housing market

Profits dip in 2023 despite construction of record number of new homes
1 day ago

Vistry signs partnership deals for 1,900 mixed tenure homes

West Sussex former airfield and Newmarket sites to break ground
2 days ago

Turnover at Wates tops £2bn for first time

Construction division exceeds £1bn turnover as average contract value hits record high of £48.3m
2 days ago

L&G looks to sell Cala Homes in exit from house building

Insurance giant reported to be preparing to offload 3,000 homes-a-year developer
3 days ago

Multiplex profit almost trebles as margin hits 5.5%

Revenue jumps 20% to £675m as big London scheme complete
2 days ago

TopHat puts plans to open huge Corby factory on hold

Advanced manufacturing facility was due to employ 1,000 people
2 days ago

Laing O’Rourke lands Calderdale hospital job

Enabling works to start by the end of this year at West Yorkshire site
2 days ago

Go-ahead for £475m Sunderland film and TV studios

Work to start this year on first phase Corwn Work studios
2 days ago

Willmott Dixon set for £20m Stockport Community Hub

Planning decision expected in June on Marple leisure and health clinic project
2 days ago

Police hunt for blundering dumper truck thief

Raider drove into a fence before getting stuck on a bank
2 days ago

Beattie Passive files administration notice

Passivhaus pioneer has been in business for more than ten years
3 days ago

McAlpine set for £50m space and tech centre

Northumbria Uni sign pre-con deal for new satellite research hub
3 days ago

VolkerFitzpatrick seals £34m Kent road viaduct

Work to start next year on Sturry Link Road near Canterbury
3 days ago

Eight win £600m Scottish civil engineering framework

Balfour, Farrans, Graham and Morgan Sindall win major works lot
3 days ago

Site engineer crushed to death by excavator

22-year-old victim died just months after graduating from university
5 days ago

NG Bailey fined £135,000 after hospital site death

Worker died after striking overhead beam while navigating a mobile elevating work platform
5 days ago

Kier lands £30m Mansfield Connect project

Construction to start in January 2025 on town centre regeneration scheme
3 days ago

Award-winning steelwork firm files administration notice

Kelpies steelwork specialist SH Structures files court notice
6 days ago

Contractor services