INDUSTRY INSIGHT FMJ.CO.UK
LEGAL VIEW
6 MARCH 2019
INTERSERVE RESULTS BETTER
THAN EXPECTED AS DELEVERAGING
PLAN GETS UNDERWAY
Services provider Interserve published a slightly strong set of full year results
than expected, for although revenues declined to 10.7 per cent to £2,904.0m,
this compares favourably to 2017 which saw a loss of £244m; while its operating
profit rose to 9.7per cent.
The improvement it said was due to its ‘Fit for Growth’ programme which is “delivering
material cost savings and improving e iciency and e ectiveness across the Group. The
programme delivered £20m of savings in 2018 and is on track to deliver at least £40-50m
in annual savings by 2021.”
Interserve has also confirmed the Board has approved the Deleveraging Plan,
announced in February, believing it to be in the best interests of the Company and its
Shareholders as a whole.
It said that the Directors believed the proposed Deleveraging Plan would provide “the
Group with su icient liquidity to service its short-term cash obligations, create a strong
and competitive balance sheet and a fundamentally solid foundation from which the
Group can improve its business and deliver on its long-term strategy.”
Interserve CEO Debbie White, said: “Despite extremely challenging circumstances,
Interserve has made significant progress in 2018. Following the successful completion of
the refinancing in April 2018, the business has traded robustly in some di icult markets
and continued to win significant new contracts. The ‘Fit for Growth’ programme is
delivering material cost savings and a simpler and more e ective business structure.
The implementation of the Group’s strategy remains on track and we have delivered a
significantly improved operating profit this year, in line with our plan.
“Interserve remains focused on positioning the Group for long-term, sustainable
success. This means continuing the operational progress we are making to put legacy
issues behind us. However, the Group remains over-leveraged and the successful
implementation of the Deleveraging Plan is critical to our future, as it will ensure that
Interserve has a competitive financial structure for its future growth. I would urge our
shareholders to vote in favour of the Deleveraging Plan.”
Some of the details of the results included:
The Group’s Health and Safety performance improved in the year with its Lost Time
Incident Rate falling by 25 per cent to 0.98 in 2018
Future workload of £7.1bn (December 2017: £7.6bn), with steady momentum
particularly in Support Services Defence, Healthcare and Regulated Sectors
Operating profit in Support Services increased by 38.9 per cent from £42.2m to £58.6m
as a result of an operational improvement plan
In 2018, UK Construction secured access to Government framework pipeline sales
opportunity of £1.0bn International Construction business secured a number of
contract wins in the period particularly in the UAE
Equipment Services revenue lower as major UK infrastructure projects not repeated in
2018 and impact of Qatar embargo; strengthened competitive position through rollout
of new product ranges
Continued progress on closing out remaining Energy from Waste projects
Said White: “Interserve has significant opportunities as a best-in-class partner to the
public and private sector, and we are making good progress putting in place the right
services, governance and financing to deliver a stronger future for our customers and our
68,000 people.”
A HISTORY LESSON
IN FACILITIES
MANAGEMENT
David Sharp, Managing Director,
International Workplace
One of the best questions I ever came across was this from
the Cambridge University entrance examination: “What
is not history?” While I neither attended Cambridge, nor
studied history, it’s always made me think about the
important role the past plays in determining the future.
Surely history was what had already happened, and so
anything that hadn’t happened yet clearly wasn’t history?
But it’s obviously not that simple.
To celebrate our company’s 10th anniversary conference,
I wrote an article on what I thought the event would look
like in 10 years’ time. That was back in 2008, so now is not
a bad time to look back on my predictions.
I should fi rst say that we stopped running our annual
conference in 2012, so that’s one thing I didn’t see coming!
But some of my other crystal ball gazing from 2008
proved a little more insightful.
• The beginnings of gig economy were already evident. I
wrote then: “I can see ever more work being undertaken
from home by workers (not necessarily employees) who
share responsibility for complying with the requirements
of workplace law in a contract with their employer. For
employers, it could reduce workspace costs, and could
help to unburden businesses from some of their onerous
legislative requirements.”
• I thought there would be a legal framework to support
this new fl exible working regime: “High up on the agenda
will be the government’s new legislation surrounding the
employer-worker contract… putting more onus on the
individuals to be responsible for their home workplace in
return for greater fl exibility.”
• I noted a growing onus on the employer to look after
mental, as well as physical, health: “Case law on workrelated
stress will feature highly, with new regulations
restricting how employers interact with workers.”
• And – while I didn’t necessarily see GDPR coming 10
years later! – I did pick up on its importance: “Data
protection will be one of the major issues for employers to
get to grips with as information security and intellectual
property rights become even more highly guarded.”
All in all, I like to think I made a reasonably good stab at
planning a conference 10 years ahead of time. But many
of these themes were not new then and – just as the past
infl uences the future – they feature heavily in the way the
world of work is changing now.
If there is a singular concept that unites them, it is the
increasing amount of granularity that is both possible
and increasingly expected in every aspect of our lives. As
the physical world becomes mapped onto a digital world,
then granularity – and the ability to discern diff erence –
becomes more important.
This applies not just in the workplace or in business,
but everywhere. Where once so much was binary, now
there is a demand to sift, segment and make fl uid. Gender
identities. Employment statuses. Procurement contracts.
TV channels. Political blocs.
My prediction would be that the winners will be the ones
who are able to discern the granular data that matters, and
analyse it to gain insight to inform the future. What is not
history about that!?