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National living wage to hit Interserve by up to £15m in 2016

Interserve will pay out up to £15m extra in 2016 as a result of the new national living wage, the firm revealed today.

In its half-year results, the group revealed revenue and pre-tax profit increases of 16 and 19 per cent respectively.

The group continues to perform strongly, but chief executive Adrian Ringrose admitted the premium for the new national wage announced by George Osborne in the Summer Budget would cost them between £10m and £15m extra next year in its support services division.

He said the impact would recede post-2016, as “the change is priced into relevant contracts”.

The company has begun talks with public sector clients over more than 10,000 staff working in UK support services on contracts with an average duration of four years.

Numis today predicted the cost would reduce Interserve’s pre-tax profit in 2016 by 12 per cent.

Financials

  H1 2015H1 2014 
Revenue £1.6bn£1.37bn+16%
Headline total operating profit £60.3m£53.7m+12%
Profit before tax £33.7m£28.3m+19%
Headline earnings per share 30.3p27.5p+10%
Future workload £8.3bn£7.5bn+11%
Interim dividend 7.9p                   7.5p+5%


 

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