Interserve reports £244m loss as boss blames “self-inflicted mistakes”

British contractor Interserve has cited an “inefficient operating model” and high overheads after the firm revealed very disappointing results for 2017.

For the year to 31 December 2017, the company posted a pre-tax loss of £244.4m on a revenue of £3.25bn. This compares with a revenue of £3.24bn and a pre-tax loss of £94.1m a year earlier.

The support services company has battled with numerous losses, particularly in the energy-from-waste sector where it has had to write off more than £250m, including a project in Glasgow which ran £95m over budget. Today’s announcement comes just days after shareholders voted to approve increased borrowing limits of £1bn. 

Chairman Glyn Barker, who became chairman in March 2016, said the group’s results had been “extremely poor”.

He added: “Success in our business requires discipline over the selection and pricing of bid opportunities, strong operational control over margin and cash generation, and an efficient, competitive cost infrastructure. It is clear to me that these disciplines have been inadequate in Interserve for a number of years. This is reflected not only in the underlying weak performance last year, but also by the provisions in these accounts against certain contracts resulting from our recent contract review. It is of no consolation to observe that many of these issues are also reflected in the performance of some of our competitors in construction and support services.”

Chief executive Debbie White was focused on a more positive approach and said a lot of work in the year had focused on refinancing, conducting contract portfolio assessments and introducing new management disciplines.

"2017 was a difficult year for Interserve, but it was also a year of significant progress,” she added. “As a new management team, we have stabilised the business and taken the first actions to establish a solid foundation from which we can both serve our customers effectively and underpin improved future operational and financial performance.”

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