6th May 2016 06:31
LONDON (Alliance News) - Interserve PLC on Friday said its expectations for its UK construction division have been hit "significantly" by a further deterioration in its contract in Glasgow, and said it now expects net debt to come in GBP35.0 million higher than previously guided.
The support service and construction company said it expects further cost overruns and delays in relation to its energy from waste contract in Glasgow, following issues relating to the design, procurement and installation of the gasification plant, together with continuing challenges with the supply chain.
As such, Interserve said it anticipates a GBP70.0 million exceptional contract provision to be taken in the first half of 2016, resulting in a similar level of outflow spread across 2016 and 2017. The company said it will be "pursuing every opportunity to mitigate this situation", but noted that this has pushed up its net debt expectations around GBP35.0 million higher than its previous guidance.
Interserve said trading in its support services division has been robust and in line with its expectations. Performance in the Middle East was also in line with expectations, although Interserve noted that "some uncertainty remains".
The strategic review of its equipment services division is proceeding to plan, Interserve said, and its international construction business is also performing as expected.
By Hannah Boland; [email protected]; @Hannaheboland
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