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Good news follows bad for Interserve after new contract win

20 October 2017

Following profit warnings in the last two months, Interserve has brightened its prospects with a major contract win with the Department for Work and Pensions (DWP).

This is said to be worth £227m over the course of the next five years and will require the company to deliver a range of services, with Sodexo managing the integration aspect.

The existing DWP PFI contract will reach the end of its schedule on 31 March next year.

Prior to the contract win being made public, Interserve had issued an update that included the announcement that it would breach banking covenants due to continuing issues over its withdrawal from Energy from Waste contracts.

The business has also issued three profit warnings this year, the latest of which came in September.

Operating profits were expected to be half the figure recorded a year earlier, following reduced trading and margins within both its FM services and construction operations.

Speculation on a take over bid was growing, following the company's recent announcements.

The company's share price rose above 74p earlier today, providing a degree of recovery after the falls that had resulted from its previous share warnings.

Its new DWP contract will see Interserve deliver cleaning, catering, waste disposal, and mechanical, electrical and building maintenance services.

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