Interserve made a pre-tax loss of £6m in the first half of 2018, as revenue slipped 9.7% to £1.49bn.
Nonetheless, the firm said it had made “good operational progress” as it worked through its Fit for Growth recovery plan, which it said would deliver £15m in savings in 2018.
A total of £8m of those savings were made during the first half of the year, to 30 June.
The company aims to achieve £40-£50m in annualised savings by 2020.
Meanwhile, the UK construction business saw a return to operating profit as Interserve continued to strengthen its pricing and bidding controls.
Interserve’s UK construction arm made a £5.6m operating profit in the first half of 2018, down from £9.6m in the first half of 2017.
The company’s international construction division continued to be impacted by macroeconomic challenges, including a trade blockade in Qatar which has delayed a number of contract awards, the company said.
Net debt stays high
Its net debt ended the period at £614.3m, which the firm said was “consistent with the guidance given at the time of our full-year results”.
However, net finance costs in the period were “significantly higher” at £31.1m, up from £9.6m in 2017, reflecting the cost of additional debt facilities plus revised pricing on old facilities.
Chief executive Debbie White said: “The first half of 2018 was an important period for Interserve as the new management team took actions to bring stability to the business and agree the direction of the group’s future strategy. The ‘Fit for Growth’ initiatives we are implementing are delivering material cost savings and will result in a simpler, more focused and more effective Interserve.
“First-half trading performance was in line with our expectations. We continue to make progress on the resolution of our EfW projects, although risks to the programme still remain. We believe that the benefit of the actions taken in the first half underpin our unchanged full-year expectations, as we make further progress with the implementation of the group’s strategy and the Fit for Growth transformation programme.”
