More news on EDDC’s new HQ builder

Owl says: EDDC getting a taste of the new build problems many house buyers are getting in East Devon, though this time it’s our taxes paying for them. Hope it is a fixed-price contract with penalty clauses and good insurance!

“… Signing up to a host of loss-making contracts and a disastrous foray into building energy-from-waste facilities have helped to send Interserve tumbling £244 million into the red.

Glyn Barker, chairman of the private sector provider of public services, said that the company had “suffered unprecedented levels of disruption and faced significant challenges” as it reported deep losses and warned that debts could more than double to £680 million this year….

The company’s shares, which have crashed by more than 80 per cent over the past five years, slumped a further 13¼p, or 12.3 per cent, to close at 93¾p yesterday.

The £244 million losses for 2017 included a 62 per cent slump in underlying operating profits to £52 million. Interserve was dragged into the red by writedowns of £98 million on the value of its assets, £67 million of restructuring and property costs and provisions of £86 million for lossmaking contracts.

About 125 of its contracts are in trouble. These are mainly in construction, but also include losses that Interserve is taking for looking after US military bases in Britain and a hit from the part-privatisation of the Probation Service. It took an extra £35 million of charges in the energy-from-waste fiasco that started the company’s crisis after it incurred £160 million of fines and penalties in 2016.

Interserve also reported £14 million of payments to consultants and advisers with a warning that the company would incur another £25 million this year.

Last week Interserve raised £196 million, taking its borrowing facilities to £834 million. Ms White said: “I would not say we are out of the woods. The debt refinancing has taken up a lot of our time.”

Source: Times (pay wall)

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