Interserve exits energy projects as half-year losses hit £34m

Aaron Morby 6 years ago
Share

Interserve is pulling out of energy from waste construction after taking a major hit on its Glasgow and other waste projects.

Ringrose says managing the challenges of exiting complex energy projects is a significant priority
Ringrose says managing the challenges of exiting complex energy projects is a significant priority

The firm revealed the extent of damage to the business this morning after reporting a half-year group pre-tax loss of £34m.

Chief Executive Adrian Ringrose said: “We have taken the decision to exit business where we take contractual process risk on the construction of energy from waste facilities.

“The exited business comprises six contracts with aggregate whole-life revenues of £430m that we entered into between mid-2012 and early 2015.”

He added: “Our assessment of the aggregate impact of the exited business is in line with the £70m we announced in May.

“The significant milestones that effect our exit from these contracts will take place through 2016 and 2017 and we expect the cash outflow associated with these losses to be substantially borne this year.”

He added: “Managing the challenges of exiting from these complex projects is a significant priority, as is ensuring our processes continue to improve given the lessons we have learned.”

Ringrose said headline trading across the rest of Interserve’s divisions and regions remained good. Revenue rose 2.4% to £1.63bn with headline operating profit, excluding energy contracts, ahead a similar amount at £63m.

But an £88m operating loss on exited energy from waste projects plunged the firm into a £33.8m pre-tax loss for the half year.

The strategic review of the equipment services division, which incorporates RMD Kwikform, continues and is expected to be concluded later this year.

Divisional trading – excluding energy from waste
Division Profit H1 2016 Profit H1 2015 Turnover H1 2016 Turnover H1 2015 2016 Margin 2015 Margin
Construction UK £4.5m £6.6m £468m £432m 1% 1.5%
Construction Int £6.0m £4.9m £141m £130m 3.9% 3.3%
Support services UK £36.7m £40.0m £899m £933m 4.1% 4.3%
Support services Int £6.5m £4.0m £147m £103m 4.5% 4.2%
Equipment services £23.5m £18.6m £110m £104m 21.4% 17.9%

Latest news

Pagabo names £1.6bn civils framework winners

Forty eight firms secure spots on new civils and infrastructure framework
2 days ago

£1.25bn Stonehenge tunnel job winner revealed

Spanish, Italian, and Austrian JV scoops A303 Amesbury to Berwick Down scheme
3 days ago

Altrad swoops for Doosan Babcock

Over 4,000 staff will transfer to the fast-expanding industrial services group
2 days ago

Suspended jail sentences after fatal roof fall

Court sentences two men after hearing of safety failures on over-cladding job
2 days ago

McAleer & Rushe on track for record £425m revenue

Revenue and profit return to pre-pandemic level as focus grows on high-rise flats
2 days ago

Domis on the hunt for subcontractors and suppliers across Cornwall

Contractor hosting meet the buyer event to set-up local supply chain for string of major projects
2 days ago

Lendlease £140m hospital claim to hit High Court

Cramlington hospital trust claims for new temporary building while remediation works carried out
3 days ago

Balfour bags £50m Piccadilly Line upgrade

First award under latest London Underground High Voltage Power framework
3 days ago

Cash runs out on HS2 old Curzon Street station refurb

Laing O'Rourke/Murphy JV halts work on historic station renovation
3 days ago

MPs call for cut in building demolitions to save carbon

Watchdog MPs set out urgent plan to prioritise retrofit and reuse of buildings over new build
3 days ago

Structure Tone stems losses as order book grows

Fit out specialist racks-up £4m loss but is confident of turnaround this year after restructuring
3 days ago

Construction leaders launch inflation busting taskforce

All sides of industry urged to work together rather than row over price hikes
4 days ago

HG Construction names next chief executive

Adam Quinn, son of one of the MBO founders, to take the reins in July
3 days ago

Lendlease Stratford IQL blue towers approved

35- and 14-storey hexagonal blocks will provide 350 flats
3 days ago

Track worker killed by train was controller of site safety

Distracted rail worker "lost awareness of his position relative to the line the train approached on"
4 days ago

MechFS went down owing £9.5m to supply chain

Subcontractors left holding millions in worthless invoices
4 days ago

HG Construction profit jumps 50% to £25m

Multi-storey homes and student accommodation jobs drive sales to record £243m
4 days ago

Go-ahead for Newcastle’s largest build to rent project

Work to start on 14-storey flats complex in the autumn
4 days ago

Contractors wanted for £288m Northumbrian Water frameworks

Ten lots up for grabs under latest major civils deal
4 days ago

Plans in for 142-room Exeter net zero hotel

RED Construction to build first of hotel developer's planned chain of net zero hotels
4 days ago

Rail workers vote to strike over maintenance job cuts fears

Network could grind to a halt next month
4 days ago

Race for £100m Immingham ferry terminal job

AB Ports aims to start work in mid 2023
5 days ago

Sisk wins Stockport £60m Weir Mill restoration

Work to start next month on 250 flats scheme
5 days ago

Developer swoops for 1,000-flats landmark Leeds site

Revised plans to be submitted by the end of the year for start soon after
5 days ago

Dominvs seals £173m funding for 713-bed student job

HG Construction to start major Hammersmith student complex in November
6 days ago

Briefings start for £1bn Midland Mainline Electrification plan

Market engagement starts for next seven sections covering 139km route to Sheffield
5 days ago

Forterra pushes back £27m factory refurb plan

Supply chain shortages hit project as brick prices rose another 12% last month
5 days ago

Speedy Hire results slowed down by KPMG

Hire giant left "frustrated and disappointed" by delay request from auditor
5 days ago

London office starts set to surge over next 6 months

Deloitte Crane Survey predicts jump in starts in Capital despite high building costs
6 days ago

Fit-out firm BW Workplace slips into the red

£5.2m backdated R&D tax credit deal lifts after tax performance
6 days ago

Contractor services