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Interserve is to close its troubled energy-from-waste business after racking up a 拢33.8m pre-tax loss in the first half to June.

A 拢72m loss on energy-from-waste contracts dragged the firm into the red. The previous year the firm had posted a 拢33.7m pre-tax profit for the period.

. In previous updates Interserve had flagged three loss-making energy-from-waste contracts to investors.

But now Interserve has taken the decision to quit the energy-from-waste sector altogether.

Interserve鈥檚 work in the sector currently comprises six contracts worth 拢430m that should all complete by next year. Interserve said the cost of closing out these contracts would be 鈥渟ubstantially borne this year鈥� and were covered by the 拢70m writedown announced in May.

The firm added: 鈥淢anaging the challenges of exiting from these complex projects is a significant priority, as is ensuring our processes continue to improve given the lessons we have learned.鈥�

Before exceptional costs, Interserve posted underlying pre-tax profit of 拢53.8m for the half-year, marginally up on 拢53.3m the previous year. Revenue edged up to 拢1.85bn, up from 拢1.8bn.

The firm said it won 拢1.9bn of new business over the period, including major contracts for the Defence Infrastructure Organisation, Home Office, JLL, Renfe, East Midlands Trains, Emaar (UAE), Majid Al Futtaim Group (UAE) and Hitachi (Qatar).

Adrian Ringrose, chief executive at Inteserve, said: 鈥淭rading in the first half of the year, across the vast majority of our divisions and our regions, has been good, in markets that offer both opportunities and challenges. We delivered a strong cash performance and grew revenue and headline operating profit.

鈥淒espite the increased political and macro-economic uncertainty following the UK鈥檚 EU referendum, our outlook for the current year remains unchanged. This, together with our significantly improved cash flow and healthy future workload, underpins the Board鈥檚 confidence in ourprospects and a further increase in the interim dividend.鈥�