The international support services and construction group reported a headline total operating profit of 拢124.2m (2015: 拢145m) and a headline pre-tax profit of 拢106.5m, but the resulting before-tax figure was a loss of 拢94.1m (2015: 拢79.5m profit).
The 拢160m exceptional charge for the exit from the energy from waste sector was due to delays and performance issues. (link opens in new tab).
Chief executive Adrian Ringrose said that 2016 was a mixed year for the group. 鈥淲e delivered a strong cash performance and the majority of our businesses performed well despite political and economic uncertainties, together with the impact of the National Living Wage in the UK. However, the performance of our UK Construction business was disappointing, and we are focussing our efforts on improving and re-shaping this business.鈥�
鈥淢anaging the challenges of exiting from the Energy from Waste sector remains a significant priority,鈥� said Ringrose. 鈥淎s previously announced, we have increased the exceptional provision for exiting this market and the associated contracts to 拢160 million. We expect to complete substantially all of the construction and commissioning of the projects during 2017, although our contractual obligations in respect of warranties, and the resolution of claims will continue for a period thereafter.鈥�
Revenue in 2016 was virtually unchanged - 拢3,244.6m in 2016 compared to 拢3,204.6m in 2015.
Growth from international businesses was offset by a modest decline in UK support services was due to delays in government procurement around the 2015 General Election and Brexit uncertainties. Interserve reports a future workload of 拢7.6bn, with particularly strong growth in international construction. Key contract wins last year included work for the Defence Infrastructure Organisation, the Home Office, BBC, JLL, Land Securities, Severn Trent, Meraas (Dubai), Sepco (Oman) and InterContinental Hotels Group (Qatar).
The headline total operating profit reflected strong performances from equipment services and international construction and resilience in UK support services, offset by weak performance from UK construction.
Ringrose added: 鈥淒espite the increased uncertainty following the UK鈥檚 EU referendum, our outlook for the current year remains positive. This, together with our strong market positions and healthy future workload, underpins the board's confidence in our medium-term prospects.鈥�
Got a story? Email news@theconstructionindex.co.uk
