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Feb 28 Interserve reported an annual
loss and suspended its dividend on Tuesday after the British
support services and construction company booked a
bigger-than-expected charge on its exit from the
Interserve fell to a pretax loss of 94.1 million pounds
($117 million) for the year ended Dec. 31 from a profit of 79.5
million a year earlier.
Last week, it more than doubled an expected charge
associated with the exit to about 160 million pounds after
reviewing operational developments at the unit, but some
analysts doubted the increased charge would be enough.
Interserve announced it would exit the energy-from-waste
business in August, after noting cost overruns and delays in the
The company has also been drumming up business for its
support services division as construction in the UK has been
hurt by supply chain failures and pricing pressure.
However, on Tuesday Interserve said it was focused on
reshaping its UK construction business, as performance there was
It said annual revenue was largely flat at 3.2 billion
pounds, as growth in its international businesses was offset by
a modest decline in its UK support services unit due to delays
in government procurement because of 2015 general elections and
uncertainties over Britain's exit from the European Union.
A number of British support services companies have been hit
by Brexit worries, which has caused delays to contract decisions
and forced some to warn on profits. Data out this month
indicated that business investment fell in the fourth quarter
compared with the July-September period.
Interserve proposed no final dividend, meaning that its 2016
dividend fell to 8.1 pence from 24.3 pence a year earlier.
"The board has a medium term objective to reduce our overall
indebtedness and enhance liquidity levels further whilst
continuing to invest in our core businesses. We have therefore
taken the difficult decision to suspend the dividend
temporarily," Chief Executive Adrian Ringrose said in statement.
($1 = 0.8047 pounds)
(Reporting by Esha Vaish in Bengaluru; editing by Jason Neely
and Susan Thomas)