Interserve Construction in £108m loss

Interserve Construction UK, which last week announced that it was rebranding to become Tilbury Douglas, recorded an operating loss of £108m, according to its latest annual financial results.

Interserve Construction saw its revenue slip from £747m at the end of 2018, to £485.3m for the year to 31 December 2019. It made a £107.7m operating loss in 2019, down from a £2.3m profit the year before.

Interserve blamed the losses on losses incurred in London on a number of projects and said it had exited “non-core business areas” during the year. The company had well-publicised struggles with a number of energy from waste plant projects and announced in 2016 that it would walk away from the sector, however several contracts dragged on into 2019.

Interserve saw significant upheaval in 2019, after the group went into a pre-pack administration in March after shareholders voted to reject a rescue plan, before making the transition to a UK listed company to a privately held one.

Nonetheless, the company said following the appointment of Nicholas Pollard as chair of the construction division and Pail Gandy as managing director in October 2019, it was “well placed” to benefit from local and national government investment. It said it entered 2020 with a strong order book in key sectors.

Interserve Group chairman Alan Lovell acknowledged that following the results period, the covid-19 pandemic had created short-term reductions in revenue in its construction business and at RMD Kwikform but that it had also seen “some benefits” from the government’s response to the disease, including leading the construction project for the conversion of the NEC in Birmingham to a Nightingale hospital.

Last year also saw a “limited” cyber-attack against RMD Kwikform, which caused some disruption its operations but was smaller than a “significant and sustained” cyber-attack in May 2020 which caused “considerable distress” to the company’s operations. Lovell said that implementation of the company’s crisis response plan as well as support from the UK’s National Cyber Security Centre and the National Crime Agency ensured that there weren’t “major impacts” to customers, despite the operational challenges.

Lovell said: “Following the recent completion of Mitie Group plc’s acquisition of the support services division, Interserve Group is now a smaller company focused around the remaining businesses, RMD Kwikform and the construction division. I am confident that with the new leadership teams and business plans in place they are well placed to continue to grow in the markets they serve.

“Over the past year our colleagues have continued to show outstanding leadership and resolve, ensuring that we deliver the very best public and private sector services to our customers despite the challenges of the administration of Interserve Plc, covid-19 and the cyber-attack. I would like to sincerely thank all our colleagues for their remarkable efforts, particularly in support of the UK government’s covid-19 response.”