Debt levels at Interserve reached £614.3 million during the first half of this year as the company continued its restructuring plans under the “Fit for Growth” programme, according to its half-year results for the six months ended 30 June 2018.

Revenue year-on-year decreased to £1,488.3 million (H1 2017: £1,647.7 million) and total operating profit was also lower at £40.1 million (H1 2017: £56.6 million).

Another 470 jobs were lost during the period as revenue dipped to £1,488m ( H1 2017:£1,647 million) .

Construction made an operating profit of £5.6 million from revenues of £396 million on ongoing business but results were dragged down by legacy contracts.

Interserve said it will complete and hand over problem energy from waste (EfW) contracts by the end of this year.

Chief Executive Officer, Debbie White said that Group performance in the first half of the year reflected the positive results of actions taken over the last nine months across the Group, offset by tough conditions in some markets, notably Qatar, impacting the construction and equipment services businesses.

Equipment Services saw lower revenue and profit due notably to the trade blockade in Qatar and a reduction in infrastructure projects in the UK. The UK market remains the largest contributor to the division’s profit where activity levels in the market have been lower year-on-year with the completion of two major infrastructure projects in 2017. Interserve said the business is working closely with HS2 consortiums and the Thames Tideway construction consortiums and revenues will be realised as the on-site works commence over the coming months and beyond.

Commenting on legacy Energy from Waste (EfW) projects , Debbie White added:

“We have continued to make further progress in reducing the risks facing the Group with progress on our Energy from Waste (EfW) projects, the renegotiation of certain onerous contracts and the completion of the refinancing of our existing facilities with the agreement for additional borrowing facilities at the end of April.”

A further £11.2 million of losses have been recognised on EfW projects during the period following further delays and associated costs and damages. Interserve said it anticipates that all EfW sites will be commissioned and handed over in the second half of 2018. After hand-over, the remaining potential liabilities for the Group relate primarily to operational performance to the specified levels.

The Fit for Growth transformation programme was developed to address the operational and organisational complexities inherent in the group, added. This included completion in July of the second phase of organisational simplification which saw the loss of a further 470 jobs. Under Fit for Growth the Group combined the UK procurement activities during the first half under a new procurement leader with the aim of building a single procurement function.

Interserve has also begun the implementation of its Support Services business strategy and increased the focus in UK construction business in completing and closing out older contracts .

The UK construction business, where the Group has been targeting framework agreements, saw a return to operating profit with an opportunity pipeline in excess of £900 million pa. During the period Interserve won five framework projects for Northumbrian Water with around £15 million.

Interserve said it is continuing to look at all options to reduce debt – the Group has identified a number of other non-core businesses for disposal and is looking to complete them over the next 12 months.