Interserve has received a boost after revealing a £227m facilities management deal with the Department for Work and Pensions (DWP), the day after issuing a fresh profit warning.
The embattled firm, which warned yesterday if may breach its banking covenants, has won the five-year contract to carry out M&E and building maintenance services for the DWP estate, along with cleaning, catering and waste disposal services at 700 buildings.
The news saw its share price jump 10 per cent in mid-morning trading.
Interserve chief executive Debbie White said: “We are delighted to be working with the DWP on this exciting new chapter in its history.
“Our goal is to deliver a seamless transition to providing facilities management services to the department.”
Yesterday the contractor saw its share price plummet to an all-time low of 56p after it announced its operating profit for the second half of 2017 would be around 50 per cent down on the same period of 2016.
Ms White, who took the reins at Interserve last month, told analysts the company will carry out “immediate cost reduction” to improve competitiveness and will also look at possible disposals.
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Much of the company’s troubles stem from its energy-from-waste contracts, with yesterday’s announcement revealing a further £35m had been set aside to cover delays to EfW projects, on top of the £160m set aside for 2016.
However, Ms White also announced Interserve will review all construction and support services contracts as part of a turnaround plan.