Interserve Board Calms Investors Amid Share Price Volatility

Interserve has issued a statement following a second day of volatility in its share price, which lost 10 per cent on Monday, falling to 39 pence (its lowest level for 30 years), on the back of negative sentiment from analysts following the release of a trading update waste-to-product JV partner, Renewi.

In a statement released this afternoon, the Interserve board, stated:

"Interserve confirms that the implementation of the Group's strategy and the Fit for Growth transformation programme remains on track and the Group continues to expect a significant operating profit improvement in 2018, in line with management's expectations".

The "Fit for Growth" programme, a restructuring plan announced by the group in October 2017, is forecast to deliver £15 million of savings from efficiency imporvements by the close of 2018.

Interserve's share price rallied briefly in afternoon trading, breaching the 40 pence level at 15:00 GMT.

Inteserve and the constructions support services sector more generally, have suffered from poor investor sentiment following the liquidation of Carillion (once the United Kingdom's largest construction company), in June this year.

Carillion's collapse has been attributed to an (almost-unique) reliance on reverse factoring, a form of supply-chain finance that concealed the true extent of its debts to suppliers.

Mar Beltran, S&P Global Ratings' senior director and sector lead for infrastructure, EMEA, considers the circumstances leading to Carillion's liquidation in the next (Q4, 2018) issue of Facilities Management Magazine (FM Magazine).