Belfast Telegraph

Interserve swings to loss as outsourcer targets £50m in cost savings

The company has embarked on a restructuring programme.

Outsourcer Interserve has swung to a loss as it scrambles to find £50 million in cost savings.

The company made a £6 million loss in the half-year ended June 30, as compared with a profit of £24.6 million during the same period last year.

Shares fell 3.3% following the announcement.

Revenues were down 9.7% from £1.64 billion to £1.49 billion.

The outsourcer has embarked on a restructuring programme, its so-called “Fit for Growth” initiative, and said this would deliver £15 million in savings in 2018, with £8 million saved in the first six months of the year.

Interserve is targeting between £40 million and £50 million in yearly savings through the programme by 2020.

The group also completed a refinancing, securing loan facilities to see the business through to 2021.

However, net debt had widened year on year from £387.5 million to £614.3 million.

Neil Wilson, analyst at Markets.com, said: “Being an outsourcer doesn’t get any easier.

“Interserve’s half-year numbers suggest that, while management is confident its ‘Fit for Growth’ restructuring is working, the numbers look decidedly skinny.”

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Interserve chief executive Debbie White (Interserve/PA)

Chief executive Debbie White said the management team had taken action to stabilise the business, and that its refinancing put the company on a “firmer financial footing” as it restructures.

“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,” she said.

“Whilst there remains a significant amount of work to do, we have energy and momentum in the business, as evidenced by the significant new contract wins secured in the first half of the year.”

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