City focus switches to Interserve after Carillion’s collapse

Markets: Group’s shares rally after investors take fright

Shares in Interserve plunged by 14% in early trading exchanges yesterday amid reports the Government is keeping a close eye on the outsourcing giant’s financial health following the collapse of Carillion.

The FTSE 250 firm’s stock fell sharply after reports the Cabinet Office was watching Interserve, which employs 80,000 staff worldwide.

The Government is on high alert after Carillion filed for liquidation on Monday, putting 20,000 UK jobs at risk.

The move follows a warning by the services group – which carried out the refurbishment of Dundee’s Malmaison Hotel and which holds a multi-million-

“Interserve has had its problems for sure, but it’s no Carillion. NEIL WILSON, ANALYST, ETX CAPITAL

pound cleaning contract covering the UK offices of Perth-headquartered utility group SSE – in September after disappointing summer trading.

A further profit warning followed in October but the company last week said trading had been in line with expectations since its autumn update and operating profits for 2018 were expected to be ahead of market expectations.

Despite its financial issues, Interserve has landed a number of contracts in recent months including a £140m facility management services deal with the BBC and a £227m Government contract to provide similar services for the Department for Work and Pensions.

“Interserve has had its problems for sure, but it’s no Carillion,” Neil Wilson, ETX Capital analyst, said.

“Its latest update showed improvement and the news will do no good for sentiment given there may be some twitchiness among investors in the sector following Carillion’s collapse.”

Shares in Interserve closed down 0.5p at 120.5p following trading yesterday.