Interserve Press Office | Aug 07, 2018
Half-year results for the six months ended 30 June 2018.
Read the highlights below, or download the full results by clicking here.
REcovery plan on track
results in-line with management expectations, outlook maintained
|H1 2018 ||H1 2017* |
|Headline total operating profit** ||£40.1m ||£56.6m |
|Headline profit before tax** ||£9.0m ||£47.0m |
|Profit / (Loss) before tax ||(£6.0)m ||£24.9m |
|Basic earnings per share ||(12.4)p ||14.8p |
|Headline earnings per share** ||4.6p ||28.7p |
Robust financial performance
- Significant operating profit improvement vs. second half of 2017, up £11.5 million to £40.1 million
- Fit for Growth programme on target to deliver £15 million savings in 2018 with £8 million secured in the first half; significant activity ongoing to achieve £40-50 million annualised savings by 2020
- Completed refinancing providing financial stability for the Group and new facilities through to 2021 to enable delivery of the Group’s business plan
- Agreed sale of Haymarket development in Edinburgh for £49.1 million, completing exit of property development business and enabling greater focus on core activities
- June 2018 net debt before recognition of deferred financing costs relating to the warrant issuance of £645.8 million, in line with expectations. Reported net debt of £614.3 million, net of £31.5 million of deferred financing costs.
Good operational progress and strategic momentum
- Lost time injury frequency rate improvement from 1.3 at December 2017 to 1.1 at June 2018.
- Future workload of £7.4 billion (2017 year-end: £7.6bn) with significant recent contract wins, including AENA (£37 million), King George Hospital (£35 million), Ministry of Justice (£25 million), Foreign and Commonwealth Office (£67 million) and Durham University (£78 million)
- Continued to derisk UK construction with the completion and close out of older contracts while rebasing the business for the future
- Successful large-scale mobilisations launched for Department for Work and Pensions (3000 employees, 800 sites) and Department for Transport (1000 employees, 1147 sites)
- Equipment services revenue lower as major infrastructure projects in the UK not repeated in 2018 and impact of Qatar embargo. Order levels starting to improve as we enter the second half
- Exited Energy from Waste business: progress in line with our expectations on the resolution of our EfW projects. Although risks to the programme still remain we are focused on the completion and commissioning of all sites in the second half.
Chief Executive Officer, Debbie White commented:
“The first half of 2018 was an important period for Interserve as the new management team took actions to bring stability to the business and agree the direction of the Group’s future strategy. The ‘Fit for Growth’ initiatives we are implementing are delivering material cost savings and will result in a simpler, more focused and more effective Interserve. The refinancing that we completed in April provides a firmer financial footing from which to execute these plans.
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. 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.
First-half trading performance was in line with our expectations. We continue to make progress on the resolution of our EfW projects, although risks to the programme still remain. 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.”
– Ends –
For further information please contact:
+44 (0) 7786 702526
+44 (0) 207 3534200
Interserve is one of the world’s foremost support services and construction companies. Everything we do is shaped by our core values. We are 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 FTSE-listed. We have gross revenues of £3.7 billion and a workforce of circa 75,000 people worldwide.
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*As set out in the statutory accounts for the year ended 31 December 2017, the 2017 results included various adjustments arising from a comprehensive Contract Review. In the main these adjustments related to contracts that were substantially complete at the end of 2016 but where additional information has come to lights since the 2016 financial statements were signed. The Contract Review also identified the need for additional provisions in respect of loss making or onerous contracts. The impact of the Contract Reviews and the results of businesses classified as “Exited” are presented as non-underlying items (see notes 4) and are excluded from the calculation of headline earnings per share (see note 7). The presentation of comparative information for the first half of 2017 has been restated to be consistent with this presentation. There is no impact on comparative net assets or statutory profit before taxation.
**This news release includes 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 11 to the condensed consolidated financial statements for a reconciliation of these measures to their statutory equivalents.