UK contractor Interserve hit by report after Carillion

Shares in British contractor Interserve plunged on Wednesday after a report the UK government was monitoring the company, exacerbating worries about the sector two days after the collapse of competitor Carillion.

The Financial Times reported that ministers were "very worried" about Interserve, a major player in the outsourcing industry that runs scores of construction and services contracts for the government and other bodies.

The government said it monitored the health of all its suppliers but it did not believe that any of them were comparable to Carillion.

Interserve shares fell as much as 15 per cent but recouped most of the losses after the government’s statement and were down 1.16 per cent by 4pm on Wednesday.

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Interserve, which employs around 80,000 people worldwide, said it was updating the government on the company’s progress with its turnaround plan.

“We continue to have constructive discussions with lenders over longer-term funding,” a spokesman for the company said. Interserve warned of lower annual earnings in September, sending shares crashing by more than 50 per cent. Another profit warning followed in October. – Reuters