Support services and construction group Interserve saw its shares rise strongly despite falling to a significant half-year loss.
The company plunged £33.8 million into the red as a result of an exceptional charge of £70m related to a troubled contract for Viridor to build a new waste to energy gasification plant in Glasgow.
The charge had previously been disclosed and did not deter bullish investors who pushed shares more than 16% higher in early trading after Interserve confirmed it was exiting the waste to energy sector.
Chief executive Adrian Ringrose said the company’s performance had otherwise been strong in the six months to June 30.
“Trading in the first half of the year, across the vast majority of our divisions and our regions, has been good, in markets that offer both opportunities and challenges,” Mr Ringrose said.
“We delivered a strong cash performance and grew revenue and headline operating profit.
“We are taking action to exit the energy from waste sector.
“Our assessment of the aggregate impact of exiting this sector is in line with the £70 million exceptional charge we announced in May.”
Despite the increased political and macro-economic uncertainty following the UK’s EU referendum, our outlook for the current year remains unchanged.
“This, together with our significantly improved cash flow and healthy future workload, underpins the board’s confidence in our prospects and a further increase in the interim dividend.”
Among the new work that Interserve picked up in the first half of the year was a £60m-plus three-year facilities management contract with property services group JLL.
The deal – which extends an existing relationship between the two firms – will see Interserve provide integrated facilities services at a total of 18 UK shopping centres, including Dundee’s Overgate mall.
The deal was secured under Interserve’s LEAN model which is designed to improve service delivery by utilising innovative technology while maximising cost savings.