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Troubled FM businesses feature in top government suppliers' list

08 January 2018

Interserve and Carillion have been accredited with winning the highest number of government contracts last year, according to The Telegraph, despite their widely publicised difficulties.

Reporting on details of a report by data analyst Tussell, the newspaper said Interserve had won £938m of government contracts, equivalent to 11% of the total, making it the leading strategic supplier.

Amey was the second supplier on the list, winning £928m, with Carillion in third place with a figure of £897m.

Describing its recent history as "turbulent", The Telegraph reported Interserve had seen profits halved and the company risking a breach of its debt covenants.

The latter had been avoided after the company secured additional short-term funding of £180m.

Chief executive Debbie White has launched the Fit for Growth plan intended to cut overheads and improve profit margins for Interserve.

Carillion contracts included the provision of FM services at "hundreds of military sites" for the Ministry of Defence (MoD), the report continued.

However, the company has seen 91% of its share price lost since last July, following a number of profit warnings.

It has also been reported that the company is now being investigated by the Financial Conduct Authority.

Reference was also made to the recent EY report which stated that FM service providers are "unlikely to improve their profits" in the next 12 months due to wage inflation and increased competition.

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