Interserve has rocky share price session

Shares in Interserve were in sharp focus yesterday amid reports that the UK government is keeping a close eye on the outsourcing giant’s financial health following Carillion’s collapse.

The FTSE 250 firm was down more than 14 per cent in morning trading, before later closing just 0.4 per cent lower at 120.5p after the Financial Times reported that the Cabinet Office had pulled together a team to watch over Interserve, which employs 80,000 staff worldwide.

The move follows a warning by the group in September over its results after being hit by disappointing trading in July and August.

It was followed by an even gloomier update in October when it issued a profit warning and said it may breach its banking covenants as it grappled with escalating staff costs, squeezed margins and a flagging performance from its justice business.

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

“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.”