Interserve unveils deleveraging plan

Interserve is to implement a “deleveraging plan” next year in a bid to rid itself of non-core businesses and stimulate capital inflows.

The support services firm is in talks with its advisors to enact the plan as it continues to exit the energy-from-waste business, whose additional cash outflows coupled with an increase in receivables in some Middle Eastern markets will contribute to a year-end net debt of £625-650m.

CEO Debbie White said: "The board 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, particularly in closing out and exiting the energy-from-waste business.”

While the group said that business has been “in-line with management's expectations” in the first nine months of the year, its construction division has witnessed a decline in revenue, with its UK unit expected to report a loss in the second half.

Interserve also mentioned that its construction order book is “lower than expected at this time of the year”, singling out Qatar as one of the challenging markets in the Middle East.

Meanwhile, delays on infrastructure projects in the third quarter have impacted the firm’s equipment services segment, although the support services division is likely to close the year on a positive note thanks to new contract wins and cost savings in the first half.

White added: "Interserve has significant opportunities as a best-in-class partner to the public and private sector, and we are working with all stakeholders to put in place the right standards, services, governance and financing to deliver a stronger future for Interserve's customers and our 74,000 people."