Interserve Press Office | Feb 28, 2017
Interserve, the international support services and construction group, reports its annual results for the year ended 31 December 2016.
Read the highlights below, or download the full results by clicking here.
Headline total operating profit*
Headline pre-tax profit*
(Loss) / Profit before tax
Headline earnings per share*
- Revenue constant at £3.2 billion, with growth from international businesses, offset by a modest decline in UK Support Services, due to delays in Government procurement around the 2015 General Election and Brexit uncertainties
- Headline total operating profit of £124.2 million. Strong performances from Equipment Services and Construction International and resilience in Support Services UK, offset by weak performance from Construction UK
- Exited business: exceptional charge of £160 million, due to delays and performance issues on Energy from Waste contracts
- Equipment Services strategic review concluded and updated strategy being implemented
- Strong underlying cash generation, gross operating cash flow of £239.2 million. New banking facilities in place to address cash outflows from exited business
- Dividend per share 8.1p – no final dividend proposed in order to enhance liquidity levels while continuing to invest in our core businesses
- Strong future workload of £7.6 billion, with particularly strong workload growth in Construction International
- Key contract wins with both new and existing clients including the Defence Infrastructure Organisation, the Home Office, BBC, JLL, Land Securities, Severn Trent, Meraas (Dubai), SEPCO (Oman) and InterContinental Hotels Group (Qatar)
- CEO succession well advanced
Chief Executive Adrian Ringrose commented:
“2016 was a mixed year for the Group. We delivered a strong cash performance and the majority of our businesses performed well despite political and economic uncertainties, together with the impact of the National Living Wage in the UK. However, the performance of our UK Construction business was disappointing, and we are focussing our efforts on improving and re-shaping this business.
Managing the challenges of exiting from the Energy from Waste sector remains a significant priority. As previously announced, we have increased the exceptional provision for exiting this market and the associated contracts to £160 million. We expect to complete substantially all of the construction and commissioning of the projects during 2017, although our contractual obligations in respect of warranties, and the resolution of claims will continue for a period thereafter.
While liquidity available to the group is adequate, having put in place new banking facilities that expand and extend our debt capacity, the Board has a medium term objective to reduce our overall indebtedness and enhance liquidity levels further whilst continuing to invest in our core businesses. We have therefore taken the difficult decision to suspend the dividend temporarily.
Despite the increased uncertainty following the UK’s EU referendum, our outlook for the current year remains positive. This, together with our strong market positions and healthy future workload, underpins the Board's confidence in our medium term prospects.”
– Ends –
For further information please contact:
Rhys Jones, Group Head of PR, Interserve, +44 (0) 7909 605336
Robin O’Kelly, Group Director of Communications, Interserve, +44 (0) 7786 702526
Richard Campbell/Michael Kinirons, CNC Communications, +44 (0) 203 219 8816
Interserve is one of the world’s foremost support services and construction companies. Our vision is to redefine the future for people and places. Everything we do is shaped by our core values. We are a successful, growing, international business: a leader in innovative and sustainable outcomes for our clients and a great place to work for our people. We offer advice, design, construction, equipment, facilities management and frontline public services. We are headquartered in the UK and listed in the FTSE. We have gross revenues of £3.7 billion and a workforce of circa 80,000 people worldwide.
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*This news release and the Annual Report include a number of non-statutory measures to reflect the impact of non-trading and non-recurring items. Use of these non-statutory measures is considered to better reflect the underlying trading of the business. See note 15 to the condensed consolidated financial statements for a reconciliation of these measures to their statutory equivalents and note 9 for calculation of earnings per share.