Interserve shares dive after a waste of £70 million on energy plantComments Off on Interserve shares dive after a waste of £70 million on energy plant
Shares in support services and construction firm Interserve crashed 26% to a four-year low as an almighty stink emerged from a “waste-into-energy” plant it is building in Scotland.
It is taking a massive £70 million exceptional charge equivalent to almost half the £154 million contract for the plant it is building in Glasgow for Veolia.
Interserve, led by Adrian Ringrose, said: “Our expectations for the UK construction division as a whole have been significantly adversely impacted by a further deterioration in our Glasgow energy-from-waste contract.”
It added: “The issues relate to the design, procurement and installation of the gasification plant, together with continuing challenges with the supply chain that will result in further cost overruns and delays.”
That will push up net debt by £35 million this year and cut cashflow this year and next. broker Peel Hunt called it “an unwelcome surprise given a belief that this had been addressed in 2015.” It cut its target price from 600p to 450p, still way above the 289p to which the shares plunged.