Interserve fresh profit warning as waste job costs spiral

Interserve fresh profit warning as waste job costs spiral”

In an update today the company revealed that things were getting worse: "Trading in the United Kingdom in July and August was disappointing, particularly in support services, but also in the construction division".

It added that the cost of quitting the waste-to-energy business was also now turning out to be even higher than expected. In February Interserve raised its estimate of the damage done building waste-to-energy plants from £70m to £160m.

Interserve was plunged into a £94m loss past year after making a £160m provision for exiting its waste business after revealing serious problems at its Glasgow Recycling and Renewable Energy project. It therefore expects the outturn for the full year to be "significantly" below its previous expectations.

Meanwhile, Interserve admitted the cost of exiting its troublesome waste management contracts were soaring and were to "significantly exceed" the £160m previously guided.

Interserve said it continues to believe it will be able to operate within its banking covenants in 2017.

At the time of publication shares in the company had fallen to al all time low, below 72p. The latest profit warning comes as new chief executive Debbie White stars just her second week at the helm after taking over from former boss Adrian Ringrose.

Interserve employs 1,600 across the West Midlands and is now completing a new regional headquarters next to Birmingham, Airport.

Interserve, whose activities range from providing care services to people in their homes to repairing Britain's Sandhurst military academy, said trading had been disappointing in its support service and construction units.

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