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Interserve on watch by UK government after Carillion collapse – shares fall

by | 17 Jan, 2018

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British support services and construction company Interserve saw its shares fall by around 15 per cent earlier today due to a report that said the UK government would be keeping a closer eye on its financial health after the collapse of Carillion.

The Financial Times said the company was under government watch after Carillion, it’s former competitor, went into liquidation due to its huge debts earlier this week, as the British government refused to help bail it out with taxpayer funds.

Since Carillion fell, fears have spread that other outsourcing companies in the space such as Interserve which provide key support to the public sector may also be at risk. A Government official was said to have told the publication that ministers were “very worried” about the firm, which issued several profit warnings last year amidst challenging market conditions.

However, a spokesperson for Interserve (which has about 80,000 staff globally) said: “Last week we announced that we expect our 2017 performance to be in line with expectations outlined in October and that our transformation plan is expected to deliver £40m-50m benefit by 2020.” They added, “This remains the case and we expect our 2018 operating profit to be ahead of current market expectations and we continue to have constructive discussions with lenders over longer-term funding.”

Related: Construction giant Carillion collapses

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Just like Carillion stock, shares in Interserve had already been falling throughout 2017 on top of today’s drops

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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