The Interserve board said that the strategic review, which began in February, has concluded that retaining ownership remains the best option, both for shareholders and for the business of RMD Kwikform.
The new strategy for RMDK will focus on strengthening its position where it has market leadership and restructuring operations in some smaller, less attractive markets.
In the UK the plan is to develop a leading position in ground shoring, to complement existing strengths in falsework and formwork.
RMD Kwikform鈥檚 specialist scaffolding and formwork business has become an anomaly within Interserve鈥檚 business strategy that has seen it move more and more towards facilities management rather than construction. However, it remains a highly profitable one, contributing 32% of group total operating profit in 2015.
Equipment Services made 拢42m profit from 拢211m revenue in 2015. Support services made 拢100m but from more than 拢2bn revenue. The UK construction business contributed just 拢100,000 from 拢1bn revenue.
Interserve announced today: 鈥淭hrough the strategic review, the board has concluded that we remain the best owner for RMDK and that retaining RMDK as a core part of the group, with an updated strategy, best maximises value creation for shareholders.鈥�
It added: 鈥淭he business has a track record of attractive growth (8% CAGR over the last 15 years), is highly cash generative through the cycle and produces excellent returns on capital employed (20% in 2015). It is a global business, providing an important element of diversification to the rest of the group鈥檚 predominantly UK-based earnings profile. Whilst some of our end markets face some near term uncertainty, the structural drivers for global infrastructure remain strong. This, together with our proven ability to identify and respond as market demand shifts globally,聽 underpins our confidence in the medium-term outlook and in the business鈥檚 ability to deliver sustainable margins above 20%, as we have previously guided.鈥�
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