Multinational support services and construction giant Interserve has said its recovery plan remains on track despite revealing a £6m pre-tax loss for the first six months of the year.
The company posted the loss from a profit of £24.9m last year with sales down from £1.64bn to £1.48bn for the six months to the end of June, while operating profit fell 30% to £40.1m. It comes as the support services organisation continues to try restructure how it operates.
The positive news from bosses surround its Fit for Growth programme which is on target to deliver £15m savings in 2018 with £8m secured in the first half. The company refinanced its loan facilities in April, leading net debt to rise to £614m from £502.6m.
Interserve is one of the world’s largest private contractors, employing close to 80,000 people around the world. The company has been attempting to raise funds and sell some of its operations since it issued a profit warning in October. The restructuring has seen bosses focus on government and defence, the private sector, communities and citizen service contracts.
Chief executive Debbie White said: “We believe that the benefit of the actions taken in the first half underpin our unchanged full-year expectations, as we make further progress with the implementation of the group's strategy and the Fit for Growth transformation programme. Today we have a strategy that provides a clear direction, leveraging our areas of strength, where Interserve can provide compelling customer propositions, delivered with rigorous operational and financial discipline.”
Today’s announcement comes as outsourcing companies like Interserve face extra pressure from the industry and government to strengthen contract terms following Carillion’s demise at the start of the year. The firm has spoken about how the collapse of the former construction giant had a “significant impact” on their operations and the wider market.
In March, the company agreed a refinancing deal worth almost £300m with its banks after several worrying months reassuring lenders and investors in the wake of the collapse.
White added: “Whilst there remains a significant amount of work to do, we have energy and momentum in the business as evidenced by the significant new contracts wins secured in the first half of the year."