黑洞社区

Interserve has publicly admitted that its ongoing financial mess is now affecting its ability to win work with the firm counting the cost of another year of thumping losses.

The firm stayed firmly in the red for the third successive year racking up an 拢111m pre-tax loss in the 12 months to December 2018.

In a statement accompanying the results, the firm said working capital in its UK construction business was draining away which it said was partly down to cutting down the amount of work it took on but 鈥渕ore so as the group鈥檚 financial position started to impact its ability to successfully win contracts鈥�.

Group revenue was close to 11% down to 拢2.9bn which the firm said was because of 拢216m fall in UK construction work which has 鈥渂een driven by lower activity levels as we have struggled to win new work and EfW [energy-from-waste] projects completing鈥�. Revenue at its UK construction business slumped 22% to 拢757m.

Although the firm narrowed losses from last year鈥檚 拢244m figure, the firm still blew eye-watering amounts on restructuring costs and getting its finances in order.

It spent 拢43m on advisor fees associated with its deleveraging plan, which was updated this morning, another 拢20m on restructuring costs, close to 拢25m more on getting out of the London construction market, on top of the 拢10m it spent in 2017, and a further 拢12.6m on its energy-from-waste projects where overall losses in this sector are now close to 拢230m.

And it said that it expected to spend a further 拢33m on its deleveraging plan, taking the amount it has shelled out on advisors in connection with its strategic review and refinancing of the business to 拢90m so far 鈥� having already spent 拢14m on advisor fees in 2017.

The combined cost of selling its site services business last autumn and shutting its power business, which it closed last February, was put at another 拢6.7m.

It said that it expects to be finally out of its disastrous EfW contracts in the first half of this year but admitted: 鈥淪ignificant uncertainty remains on the timing of those remaining projects.鈥�

The firm said the bulk of the 拢12.6m it lost on EfW in 2018 was because of its scheme at Derby which 黑洞社区 yesterday revealed had been inundated with complaints last year over issues to do with smell and noise.

But it said that it picked up a 拢35m EfW windfall thanks to an insurance payment it received during the year.

Its normally reliable RMD equipment services business saw revenue slip 15% to 拢196m with operating profit down 27% to just under 拢40m.

Chief executive Debbie White said: 鈥淚nterserve remains focused on positioning the Group for long-term, sustainable success. This means continuing the operational progress we are making to put legacy issues behind us.

鈥淗owever, the Group remains over-leveraged and the successful implementation of the Deleveraging Plan is critical to our future, as it will ensure that Interserve has a competitive financial structure for its future growth. I would urge our shareholders to vote in favour of the Deleveraging Plan.鈥�

Net debt increased to 拢631m which it put down to the ongoing costs of completing its EfW schemes as well as problems getting paid on certain jobs in the Middle East.