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Mon April 12 2021

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Interserve dogged by energy contract problems

13 Nov 15 Interserve has warned shareholders that its UK construction business will only just manage to break even this year because of three loss-making energy process contracts.

Interserve recently completed construction of Viridor's Peterbough waste-to-energy plant
Interserve recently completed construction of Viridor's Peterbough waste-to-energy plant

It placed the blame on subcontractors going bust.

In a third quarter trading update, the board said: “In the UK, whilst the performance of our building and fit-out businesses is encouraging, this year's segmental result will be impacted by three loss-making energy process contracts within our infrastructure business.

“This is due in large part to subcontractor insolvencies and the consequential impacts on project timing and costs. Our involvement in the delivery of these contracts is substantially complete. Expectations for the full year are for a break-even performance in the UK Construction segment.”

However the equipment services division – RMD Kwikform – “has continued to deliver outstanding growth”, the construction business in the Middle East is strengthening and support services “continues to perform well”.

Interserve has also found its next chairman.

Former PricewaterhouseCoopers managing partner Glyn Barker will succeed Lord Blackwell as chairman of Interserve in March 2016.

Lord Blackwell announced in February that, after nine years as chairman, he planned to stand down once a successor had been found.  He will retire from the board on 29th February 2016. Glyn Barker will join the board in January and take over as chairman on 1st March.

Mr Barker is also a non-executive director of Berkeley Group and Aviva, chairman of Irwin Mitchell and Transocean Partners and deputy chairman of English National Opera.

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