Interserve Plc entered administration on March 15, 2019 with a Financial Health Rating (FHR) of 27, High Risk. Administrators were appointed when shareholders rejected a restructuring deal, and the administrators immediately sold the company to an entity controlled by the lenders. This deleveraging transaction was necessary to avoid a full collapse, minimizing disruption to the businesses and customers. Interserve is a UK based, multinational group of support services and construction companies, with 68,000 staff globally.
FHR at default: 27, High Risk
What the ratings tell you.
Interserve’s FHR has been identified as High Risk for the past two years, signalling risk mitigation was warranted. The company has a low FHR of 27, and a poor Core Health Score (CHS) of 34, which puts it in Quadrant C. Our quadrant analysis helps you view both the short term risk (FHR) and medium term sustainability (CHS).
Where our analysis tells the story
The performance scores indicate that Interserve was not operating in an efficient nor sustainable manner. Operating and net profit margins are negative, as reflected by the poor performance scores. Profit margins serve as an indicator for how efficiently companies are using their resources to generate a return. The FHR Report shows that Interserve Plc had a Return on Assets of – 12.95%, meaning the company was losing £12.95 for each £100 of total assets. This is important because a company needs to generate operating profit to pay for non-operating expenses, such as interest expenses.
While Core Health measures a company's efficiency and sustainability, the Resilience Indicators measure the company's capacity to meet current obligations. Weakness in all three resilience categories is an immediate concern. The Financial Dialogue, which presents strengths and weaknesses in business friendly language, lists many of these factors as high priority items concern.
Clients can access both of these reports for Interserve PLc, along with other analysis, through the Client Portal.