Interserve CFO: We have good track record with Middle East payments
Analyst predicts international business could still be sold following 2017 losses
The international support services and construction divisions of UK services company Interserve could be sold after the company recorded a £244 million loss in 2017.
During this week’s earnings call it was revealed that the company made a loss of $333.5 million dollars despite revenues of $4.44 billion in 2017. The company blamed the pre-tax losses on margin pressure on contracts for the UK government as well as making losses on waste to energy plants.
Following the announcement of its results, Interserve’s share price was reported to have fallen by 15% on the London Stock Exchange.
“The balance sheet needs addressing and we expect that will be achieved by a mixture of disposals and a rights issue,” reported analysts Liberum. “The company may need either to raise ($465 million) from investors or to raise ($253 million) and to sell off its international support services and construction divisions.”
Like rival contractor Carillion, Interserve has a significant presence in the Middle East and operates in sectors such as hospitality and leisure, oil and gas, retail and transport and infrastructure.
Industry magazine Construction News reported that CFO Mark Whiteling allayed fears that it could also have financial problems due to its Middle East operation and said that the company has “a good track record of getting money out [of the Middle East].”
Construction News added that the company told analysts that it enjoys: “enduring relationships with clients” in the region.
