Interserve shares pop after winning place on £8bn government homebuilding framework

 
Oliver Gill
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Interserve said earlier this month that the cost to exit its waste business would "significantly exceed" previous estimates of £160m (Source: Interserve)

Troubled support services firm Interserve was today handed a lifeline by the government, winning a place on an £8bn panel to build houses on public sector land.

Earlier this month, Interserve delivered a double whammy of bad news, wiping 50 per cent of its market capitalisation away in a matter of minutes.

Interserve warned costs to exit its troublesome waste business were spiralling out of control and revealed more general "disappointing trading" over the summer months.

Today's announcement allows Interserve to bid for contracts in redeveloping state-owned land over the next four years.

Investors welcomed the news with Interserve's shares jumping over four per cent in early trading.

Read more: Interserve shares are down 50 per cent: Here's why

Interserve managing director Gordon Kew said the acceptable onto the framework "highlights our ability to deliver complex projects for our customers".

"We look forward to advising panel users from the very start of their procurement journey to help solve problems, add value and ultimately deliver quality developments that achieve both time and cost savings,” he said.

The redevelopment framework is part of a government initiative that has already delivered 45,000 homes across 250 sites. The latest four-year framework was launched at the end of July and doubles the amount of money available for investment from £4bn to £8bn.

Read more: Interserve shares show signs of recovery as with new finance director

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