Construction group will not be selling equipment business

Construction group will not be selling equipment business



Construction group Interserve has announced plans for a £17m update and restructure of its engineering equipment subsidiary following a decision not to sell the business.


The outcome follows a strategic review of the business during which Interserve’s board concluded that it was the best owner for RMDK.

Instead, Interserve will now retain RMDK as a core part of the group and update its strategy in order to maximise value creation for shareholders.

In a news release, Interserve said: “While some of our end markets face some near-term uncertainty, the structural drivers for global infrastructure remain strong.

“This, together with our proven ability to identify and respond as market demand shifts globally, underpins our confidence in the medium-term outlook and in the business's ability to deliver sustainable margins.”

The new strategy will involve strengthening RMDK’s position as a market leader, increasing its use of digital technology and growing its ground shoring services.

RMDK will also invest in growth markets to improve its financial performance and restructure operations in a number of smaller, less attractive markets.

Interserve revealed that implementing these changes would cost approximately £17m, of which the cash outflow in the next 12 months will be approximately £5m.

Despite this, the firm estimates that this restructuring will facilitate a £5m reduction in capital expenditure over the next two years and an increment to annual profitability of £1m in the first full year following its implementation.

Meanwhile, trading and cash performance in RMDK for the first nine months of the year continues to be in line with expectations.



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