Interserve Shares Sliding Towards Another Crisis?

2nd February 2018.

Outsourcing firms, which make money by running services for central and local government, have long been suspected of ailing health. Before now however, the government refused to take heed. Then the huge construction giant, Carillion, fell from grace, and now it looks like rival Interserve is set to follow Carillion into oblivion.

Shares in Interserve fell by 20 percent on Thursday, aggravating contractors’ fears after fellow outsourcing firm, Capita, released profit warnings this week. This could prove particularly damaging to small firms, who rely on those government contracts. Both Capita and Interserve are customers for some of our members at the Credit Protection Association, who are already experiencing bad payment practices. We encourage all business owners to monitor your customers closely, to allow you to make a swift exit if their stocks start to shift, or release devastating profit warnings.

Interserve executives are desperately working to restore investor confidence after the company’s stocks dropped. Chief executive, Debbie White, has announced cost-cutting plans, but debt is estimated to reach around £600 million this year.

A year ago Interserve shares stood at 352p but have since slumped 75 percent after a series of fresh profit warnings to yesterday’s close of 86p.

The Cabinet Office has tried to facilitate investors by assuring them that Interserve is not facing a similar position as Carillion, but despite their best efforts, numbers of investors have moved to sell their stock in the company.

The outsourcing sector is experiencing a complete culture shift. Originally perceived as invincible through their relationship with Government, they are now treated with suspicion and caution by contractors. Of course as a result, the public’s trust in Government is shifting. Businesses are demanding more support, which has resulted in a small business task force and a small business commissioner. Of course, despite our best efforts, late payment still lingers and will continue to haunt businesses until something is done about it.

Here at the Credit Protection Association we have helped our members with overdue accounts with Carillion, Interserve and Capita and we have got them paid! Until Government gets their act together, CPA is here to help you fight back against these late and non-payers! Whether the customers are fat cats or under dogs, you deserve to be rewarded for goods and services you have provided!