Interserve leaves energy-from-waste industry

UK-based construction specialist Interserve has announced that it is leaving the energy-from-waste (EfW) industry months after revealing complications with on-going projects had cost the company £70 million (€81m).

The company announced its decision in its recently published interim management statement.

An £88m operating loss on the firm’s EfW projects has led to a £33.8m pre-tax loss for the first half of 2016, despite trading across its other divisions seeing revenue rise by 2.4% to £1.63bn, the announcement stated.

It announced in May that technical issues had slowed down construction on its contract to build Viridor’s Glasgow gasification plant, which led to “deterioration” in the contract, prompting a £70m contract provision being imposed on the company.

The £154m Glasgow Recycling and Renewable Energy Centre was meant to begin operating this year after construction began in 2013.

The plant was supposed to process an annual 200,000 tonnes of residual waste collected by Glasgow City Council and produce enough energy to power the equivalent of 22,000 homes.

‘Healthy future workload’

CEO Adrian Ringrose said: “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. 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 £70m 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.”