Interserve falls 15% as Govt monitors health after Carillion collapse
Interserve (Frankfurt: 860509 - news) , a rival of Carillion (Frankfurt: 924047 - news) until its financial collapse this week, has seen its share price fall sharply on a report the Government is closely monitoring the company.
Stock was down as much as 15% in early trading on the London Stock Exchange (Other OTC: LDNXF - news) after the Financial Times said a small team had been put together to keep an eye on the outsourcer's financial health.
A Government official was said to have told the paper that ministers were "very worried" though another was quoted as saying there was "no comparison" with Carillion .
Interserve, which has around 80,000 staff worldwide - 25,000 of them in the UK - issued a profit warning last September which left shares losing over half their value.
It blamed high costs from its exit from the waste-to-energy sector and tough trading in its construction and business services arms.
Following an update a week ago, Interserve shares recovered some poise.
It reported that 2018 operating profit would be ahead of forecasts though a review of its contracts was continuing.
Chief (Taiwan OTC: 3345.TWO - news) executive, Debbie White, said then:
Debbie White, Interserve's Chief Executive, said then: "The new management team, and the board, have been working to stabilise the business and provide a sound foundation to continue to serve our customers effectively, underpin our future growth and to restore shareholder value.
"This work has focused on managing the balance sheet, conducting a thorough assessment of the contract portfolio, and introducing new management disciplines, processes and cost controls under the 'Fit for Growth' programme."
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