Troubled outsourcing giant Interserve has hailed “significant progress” despite posting £111.3m in pre-tax losses for 2018.
For the year to 31 December 2018, the company net debt increased to £631.2m from £502.6m and its turnover fell by 10.7% to 2.9bn. Operating profits for 2018 were down 27% to £39.6m as turnover dropped to £195.5m from £229m.
Debts suffered by the British contractor are down to incremental cash costs from Energy from Waste contracts, delays in collecting receipts from certain Middle Eastern customers and exceptional costs sustained on a number of construction projects.
UK construction turnover fell to £756.6m from £972.8m and the firm revealed an operating profit of £2.2m compared to a £10.3m loss last time.
Interserve say there is cause for optimism through its ‘Fit for Growth’ programme which continues to deliver material cost savings and improving efficiency and effectiveness across the group. The programme delivered £20m of savings in 2018 and is on track to deliver at least £40-50m in annual savings by 2021, according to bosses.
The outsourcing company also revealed further details of its proposed deleveraging deal with financiers which will be voted on by shareholders next month.
It stated the directors believe the proposed deleveraging plan would provide the group with sufficient liquidity to service its short-term cash obligations, create a strong and competitive balance sheet and a fundamentally solid foundation.
The latest results are an improvement on 2017, after the company posted a pre-tax loss of £244.4m on a revenue of £3.25bn. This compared with a revenue of £3.24bn and a pre-tax loss of £94.1m a year earlier.
Debbie White, chief executive officer of Interserve said the firm remains focused on positioning the Group for long-term, sustainable success but admitted the successful implementation of the Deleveraging Plan remains critical to its future and urged shareholders to vote in favour of the plan in a few weeks time.
“Despite extremely challenging circumstances, Interserve has made significant progress in 2018,” she said. “Following the successful completion of the refinancing in April 2018, the business has traded robustly in some difficult markets and continued to win significant new contracts. The 'Fit for Growth' programme is delivering material cost savings and a simpler and more effective business structure. The implementation of the Group’s strategy remains on track and we have delivered a significantly improved operating profit this year in line with our plan.”