Interserve shares jump despite poor UK construction performance

 
Oliver Gill
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Getting its house in order: Interserve is on the hunt for a new chief exec (Source: Getty)

Shares in support services firm Interserve jumped over seven per cent this morning after the firm revealed it was on track to hit its full year numbers.

It wasn't all good news for the firm though as it said the figures included "a disappointing performance in UK construction".

International operations saved the day, Interserve described its overseas construction and equipment services results as "strong".

11 January 2017 @ 11:00amInterserve (IRV)

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The London-listed firm said its net debt position would be between £270m-£280m, lower than previous guidance of £300m-£320m. This was owing to strong cash collections and implementing better working capital management, initiatives that had offset increased cash outflows from winding down its waste business. Such outflows were labelled as "worrying" by Andrew Nussey of Peel Hunt.

Nevertheless, Nussey expected in the firm's share price to regain ground lost in 2016 as attractive dividend payouts together with in line results could entice investors.

A new appointment but not the appointment?

Interserve also announced the appointment of a new non-exec director, Gareth Edwards.

Tom Musson, an analyst at Liberum said Edwards' "extensive experience" would bolster the firm. "He also has considerable international experience, particularly in the Middle East, where he may be expected to contribute."

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Last November, Interserve announced chief exec Adrian Ringrose would be stepping down and the hunt was on for his successor.

And analysts were thirsty for information on who is slated to take over at the helm. Musson said: "There is no news on the replacement for him as yet. It would be preferable if a new CEO could be announced as soon as possible."

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