A sharp drop in Interserve’s share price to its lowest level since 1984 has forced the contractor to issue a statement to the City in a bid to quell market jitters.
The company’s share price slumped by 20% on Tuesday (13 November) amid speculation about its financial position. Interserve has been wrestling with problem contracts in the waste-to-energy sector.
At their lowest level in early trading, the company’s stock market price hit 32.14p a share, having reached a 30-year low on Monday. Yesterday (14 November), it closed at 36.98p a share.
However, Interserve has said its recovery plan remains on track.
In a statement to the City following the press coverage, the company said: “Interserve notes recent press commentary surrounding the group and the movement in its share price.
“Interserve confirms that the implementation of the group’s strategy and the Fit for Growth transformation programme remains on track and the Group continues to expect a significant operating profit improvement in 2018, in line with management’s expectations.”
In August this year, the company revealed that it had made a pre-tax loss of £6m in the first half of 2018, as revenue slipped 9.7% to £1.49bn.
Its Fit for Growth recovery plan aims to deliver £15m in savings in 2018, with £40-50m in annualised savings by 2020.
The UK construction arm made a £5.6m operating profit in the first half, down from £9.6m in the first half of 2017.
