|Type Public limited company|
Headquarters Reading, United Kingdom
|Traded as LSE: IRV|
Area served Worldwide
Revenue 3.205 billion GBP (2015)
|Industry Infrastructure - professional services, construction services, support services, construction equipment hire and sale|
Predecessor Tilbury Douglas plc Tilbury Group plc R M Douglas Holdings
Stock price IRV (LON) 215.14 GBX -6.86 (-3.09%)14 Mar, 5:01 PM GMT - Disclaimer
CEO Adrian Ringrose (1 Jul 2003–)
Subsidiaries RMD Kwikform, Employment and Skills Group
Bournemouth imax theatre demolished by interserve construction
Interserve plc is a multinational support services and construction company based in the UK, with a revenue of £3.2 billion in 2015 and a workforce of more than 80,000 people worldwide. The company is headquartered in Reading, Berkshire and is listed on the London Stock Exchange.
- Bournemouth imax theatre demolished by interserve construction
- Name changes & international presence
- World War I service
- Exit from lighterage
- World War II service 1940 to 1945
- Operation Dynamo
- Operation Neptune
- Operation Pluto
- Post war to Stock Market listing 1946 to 1960s
- Acquisition of R M Douglas Holdings and expansion into the Middle East – 1990s
- Diversification and name change late 1990s and early 2000s
- Acquisition of MacLellan and Madina Group – 2000s
- Further acquisition activity – 2010s
- Professional Services
- Construction Services
- Support Services
- Financial information
- Annual results
- Net asset value
- Corporate Social Responsibility (CSR)
- CSR History
- Corporate lobbying
- Accounting irregularities
- Office of Fair Trading investigation
- Alleged blacklisting
- Notable construction projects
- Previous names
Interserve traces its origins to 1884, when the London and Tilbury Lighterage Company Limited (LTLD) was formed to transfer goods by sailing barge to and from ships on the River Thames, London, England. A lighterage is the fee paid for the use of a Lighter, a large, open, flat bottomed barge, that could transport goods a short distance in shallow waters. At the time London was the busiest port in the world. Lightering provided a service much in demand in the overcrowded river because of the need to transship goods from ships berthed there and to convey them to the riverside wharves, where the larger open water cargo ships were unable to dock due to their size and draft or, to more efficiently and effectively deal with the number of ships congregating in the river. By 1887 the company is recorded as occupying premises of a former Lloyd's Register Proving House and Chain-Testing Shed and subsequent Police Station at Preston Road, West India Docks
In 1888 the company expanded into dredging, where mechanisation led to greatly improved productivity, and secured a contract with the Port of London (PLA) to remove dredged ballast. This new venture was complementary to the existing business, utilising the barges already owned by the company, together with their knowledge of the river and its tides. There was a further synergy between lightering and dredging; lightering was necessary where ports were shallow and the draft of a vessel needed to be reduced to facilitate their entry into port, whereas dredging increased the depth of river channels to enable vessels with a larger draft to berth into port. The company’s move into dredging therefore protected its commercial interest against the perceived threat to lightering. This can be seen vindicated by the decline in lighterage for dry bulk cargo after the middle of the 20th century, although the eventual decline in lighterage was caused by the adoption of road haulage as the main distribution method when London's docks moved downstream (away from what is now known as Docklands) and shipping adopted containerisation methods. However, for the time being lightering still thrived and the New Zealand based Ashburton Guardian reported in 1890 that the Company was an early pioneer in the transshipment of frozen meat. The newspaper noted that their capabilities for handling this cargo had been highlighted during a trip, organized for delegates at the International Congress on Inland Navigation, to inspect the company's custom built vessels complete with cold chambers that enabled the meat to arrive at Smithfield Market frozen.
Name changes & international presence
The company changed its name several times over the next few years; in 1896 to The London and Tilbury Lighterage Contracting and Dredging Company Limited, in 1904 to the Tilbury Contracting and Dredging Company Limited, then in 1906 to Tilbury Contracting and Dredging Company (1906) Limited, before In 1908 reverting to Tilbury Contracting and Dredging Company Limited (TCDC), a name it settled on for the following fifty-six years. These were not the only changes experienced by the business, for the advance of technology meant that the firm's sailing barges were becoming obsolete by the advent of steam tugs, and the Company commissioned the new tugs to be built. As the Company grew, so did its profile and it came to be frequently featured in the pages of The Engineer. Mention is made in 1907 of the role played by its dredging craft in widening and deepening the navigation channel of the River Clyde to assist the maiden voyage of RMS Lusitania, then the worlds biggest ship. A further example was reported on 9 June 1911 which in an article about major dredging works to the River Loire around the port of Nantes, France, noted that the Company "had a special dredger constructed for the purpose". This contract is noteworthy as it comprised, at commencement, a three-year undertaking to form a new river bed to divert the course of the river, as well as removing islands and sand banks. A total of 10 million cubic metres of material was to be dredged as part of these £1,000,000.00 (2013 = £92.5M) works. On 9 December 1911 Singaporean newspaper The Weekly Sun reported that TCDC “the well-known dredging contractors of London, have entered into a contract…for the formation of a port known as Port Argentine” involving the dredging of 16 million cubic metres to form an approach channel some 9.5 miles long in the Buenos Aires province. During this period the company also carried out dredging projects in Canada, Egypt and Denmark.
World War I service
A number of the company’s vessels were requisitioned for war duties during World War I where they took part in various military campaigns including in the Dardanelles, Archangel and the Persian Gulf. Company tug 'Danube' was transferred to Admiralty control and assisted a monitor through the Mediterranean en route to the Rufiji River delta, in present-day Tanzania, in order to destroy the German raider Konigsberg.
Exit from lighterage
Lightering gradually declined due to the increase of road traffic, and dredging became the mainstay of the company. In addition to its dredging contract with the PLA, TCDC secured many other contracts including, between 1923 and 1927, the deepening and on going maintenance of the depth of the navigation channel and tidal harbour at the Port of Aberdeen 1932 saw the firm begin work on a new harbour at Haifa in British Mandate Territory of Palestine that was completed in 1934. In 1938 the company’s lighterage fleet was amalgamated with vessels owned by W H J Alexander Limited and Tate and Lyle Limited to form Silvertown Services Limited and TCDC severed its links with its original business activity.
World War II service - 1940 to 1945
As in World War I, many of the company's fleet of tugs were requisitioned for active service during World War II. These initially came under the control of the Royal Navy examination service, where they were used to patrol harbour and river entrances. The role of the examination service crews was to board all merchant ships and trawlers entering ports or rivers, scrutinise their papers and if need be to search these craft for evidence of intent to help the enemy.
Although the company had disposed of its lighterage fleet, it retained craft for its dredging activities. It was these vessels, its tugs and barges, that were represented within the merchant marine fleet that took part in Operation Dynamo, commonly known as the Dunkirk Evacuation during World War II, when in late May and early June 1940 a flotilla of 700 ships and boats assisted in the rescue and repatriation of the British Expeditionary Force (BEF) and French troops. Amongst this fleet of ships and boats was the company's dredger 'Gallions Reach', originally built in 1936 as a steam hopper, but converted at the outbreak of war to a salvage vessel, this vessel rescued 123 men from the beaches and returned them to England.
On 6 June 1944 Company tug 'Danube VI', under COTUG (Control Tug Operation), participated in Operation Neptune, the D-Day invasion of Normandy, known as the Normandy landings by towing the 'Phoenix' (mulberry harbour breakwater units) and 'Whale' (floating roadway units that connected the mulberry harbour pier heads to the landing beaches), as well as ammunition barges from Littlehampton across the English Channel to the Normandy beachhead.
Company tug 'Danube V' took part in pipelaying activities during July 1944, as part of Operation Pluto, which brought together; British scientists, oil companies and the Armed Forces in the construction of undersea oil pipelines under the English Channel between England and France to transport fuel supplies to Allied forces on the European continent.
Post war to Stock Market listing - 1946 to 1960s
As the UK sought to rebuild infrastructure after the Second World War, the Company established a civil engineering capability in the 1940s to participate in this activity; together with building these had become the company’s focus by the 1960s. In 1964 the Port of London Authority dredging contract ended, 76 years after it was first awarded, and the Company ceased to operate as a dredging contractor in the UK. In 1965 the remaining fleet of dredging vessels was sold to Westminster Dredging Company Limited. The company, by then named Tilbury Contracting Group Limited., applied for admission of its shares onto the London Stock Exchange and trading commenced on 12 October 1966.
Acquisition of R M Douglas Holdings and expansion into the Middle East – 1990s
In 1991 Tilbury acquired RM Douglas, another construction and civil engineering business, the combined business becoming known as Tilbury Douglas. Although both groups had a UK-wide presence, the rationale of the acquisition was that the two companies complemented each other. Tilbury Group was headquartered in Reading and predominantly involved in building work in the South of England and in Scotland, while R M Douglas was headquartered in Birmingham and its strongest regional presence was in the Midlands and the North of England with a strong bias towards civil engineering projects.
In common with many major national and regional contractors in the post-war period, R M Douglas successfully bid for work in the construction of airfields and motorways where it completed the following projects as part of the UK’s motorway building era in the 1960s, 1970s and 1980s:
The acquisition of Douglas also brought with it the construction equipment company Rapid Metal Developments (RMD) a formwork and falsework manufacturer, together with joint ventures in Oman (Douglas OHI) and United Arab Emirates (Khansaheb), both of which were initially established by Douglas in 1981. This expanded the geographical coverage of the company to the Middle East and this presence was further strengthened by the establishment of a joint venture in Qatar (Gulf Contracting Company).
Diversification and name change - late 1990s and early 2000s
A series of acquisitions and disposals in the late 1990s and 2000 moved the focus of the group away from property development and housebuilding, as the group sought to build presence in the maintenance and facilities management sectors, though it retained a strong presence in traditional construction contracting. Acquisitions at this time included electrical engineering contractor J R Williams in 1997, the facilities management and engineering services business How Group purchased for £46m in 1998, the £75m takeover of industrial and equipment services specialist Bandt Group in 1999 and, in a £75m purchase, facilities management company Building and Property, responsible for providing accommodation and property services to government departments.
During this period the company disposed of its Scottish housebuilding business to Persimmon plc, diminishing the significance of revenues from traditional construction contracting workstreams, with the newly diversified group now earning significant revenue through its facilities management and maintenance capability, which are otherwise known as support services provision. To reflect this change in the company's business profile, it successfully applied in 2000 to the London Stock Exchange to relinquish its listing within the construction sector of the market, but to re-list within the support services sector on the FTSE market list. To reflect this change it renamed itself Interserve in 2001.
Acquisition of MacLellan and Madina Group – 2000s
On 2 May 2006 Interserve acquired MacLellan, another support services business for a consideration of £118m. Following this acquisition and the re-structuring of its operations, to accommodate the newly purchased business, Interserve announced that it had discovered accounting irregularities in its Industrial Services business. On the day that this discovery was announced to the London Stock Exchange the Company's share price fell by 14%. This decline led to threat of legal action by former shareholders in MacLellan, who had accepted shares in Interserve as part of the acquisition and saw the value of their holdings dramatically drop. The Company was also forced to delay the official publication of its interim results to investors, so as "to verify the adjustment needed" as it sought to reconcile the misstatements. Then in 2007 the Group acquired a 49 per cent stake in the Qatar-based Madina Group. In 2008 Interserve expanded into markets in Abu Dhabi and Northern Europe.
Further acquisition activity – 2010s
Interserve announced in November 2010 that it had acquired the US formwork and shoring business CMC Construction Services in a deal worth £22 million. It was revealed on the 25 February 2011 that the Company had emerged as a bidder for fellow support services provider, Mouchel. The rationale for the bid was to “provide a much stronger platform from which to target the rapidly growing market for fully integrated outsourcing services.” Interserve had approached the target, with an offer believed to be in the region of £191M or, 170p per share, Mouchel had previously rejected two bids from Costain. However, after conducting due diligence on the struggling consulting group, Interserve reduced its indicative offer for the company, to a reported 135p per share or, £151M and this was subsequently rejected. Interserve did not progress the bid and no formal offer was tabled.
On 4 May 2012 the company acquired "Welfare-to-work" provider Business Employment Services Training Limited (BEST), one of the UK's leading providers of training and development for job-seekers and employers. Then on 12 October 2012 Interserve announced that it had sold its stakes in some of the UK’s best known private finance initiative hospitals, schools and prisons for £90m. Dalmore Capital Fund, a UK infrastructure fund, agreed to buy 19 of the businesses PFI investments, which generated £4.6m profits for the group in 2011. The Financial Times reported the sale as including “the stakes are five in hospitals – including University College London, Carlisle and Newcastle – five in schools, two in prisons and several in defence establishments.’ On 18 December 2012 it was announced that the Company had acquired Advantage Healthcare, a leading UK provider of healthcare at home services for £26.5m in cash. Then on 7 January 2013 the organisation announced the acquisition of The Oman Construction Company for a cash consideration of $34.1m.
On 28 February 2014, the company acquired Initial Facilities from Rentokil Initial for £250m.
Interserve Plc is a support services and construction company. The Company through its subsidiaries is involved in all stages of the life cycle of infrastructure and the built environment.
The company offers advice, design, construction, equipment and facilities management services for infrastructure. It operates in the outsourced services and construction markets in the United Kingdom and worldwide.
The company operates in a range of sectors, which include aviation, central government, commercial offices, defence, education, energy and water utilities, health, highways, industrial, justice, leisure, local government, marine/rivers, regeneration, retail, waste and welfare to work services
The company’s businesses are arranged into the following operating divisions (with principal subsidiaries) and service provision:
(Interserve Consulting) - Programme management, cost management and project management, CDM (Construction (Design and Management)) co-ordination, healthcare planning, sustainability and energy management.
(Interserve Construction, Interserve Engineering Services, RMD Kwikform) - Design and construction for building, mechanical and electrical installation, formwork and falsework, shopfitting and interior fit-out, civil engineering, water treatment and waste.
(Interservefm, Interserve Defence, Interserve Industrial Services, MacLellan International) - Facilities management and business services outsourcing. The company provides facilities in Private finance initiative developments in the National Health Service.
(Interserve Investments) - Operates a portfolio of Private Finance Initiative (PFI) concessions in the UK, primarily in the custodial, defence, education, health and waste sectors.
- Operates a 50%/50% Joint Venture called Rehab Jobfit within the welfare to work market as a deliverer of the government's Work Programme.
Financial information for the Company is as follows:
[a]: Restated to correct accounting misstatement in Industrial Services division. Included for comparison.
Net asset value
[a]: Restated to comply with IAS 19, IFRS 3, IAS 10, IAS 39 and IAS12
As of 22 February 2013 Interserve listed the following as "significant" institutional shareholders:
Corporate Social Responsibility (CSR)
Interserve is a constituent of the FTSE4Good Index which is designed to objectively measure the performance of companies that meet globally recognised corporate responsibility standards.
The Company has since 2002 published a Corporate Social Responsibility report section, as a means of social accounting, within its Annual Report and Financial Results.
The Observer’s “Good Companies Guide” 2008, compiled to establish Britain’s most ethical companies ranked Interserve in its top 20 out of all companies listed on the FTSE 350 Index
In 2012 Interserve established the Interserve Employee Foundation, a registered charity, which as noted in the British Quality Foundation Achievement Award 2012 citation, “aims to improve the quality of life and life chances for people in the community where they live and operate by utilising the skills, capabilities, resources and enthusiasm of Interserve's employees.”
It was announced on 25 March 2013 that Interserve is to establish an Integrated reporting accounting system, a series of metrics that are designed to measure more than financial performance, by contributing not only towards financial stability, but also sustainable economic development. The Company have joined the International Integrated Reporting Council world-wide pilot programme, comprising 85 companies, which seek to develop a reporting system that communicates how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term. Interserve have developed a plan, ‘SustainAbilities’, in conjunction with sustainability adviser, environmentalist and writer Tony Juniper co-founder of The Robertsbridge Group that will measure the Company's performance against its knowledge, natural and social capital, in addition to its financial capital.
Interserve is accredited with compliance to the following International Organization for Standardization (ISO) standards:
Interserve have been recipients of the following business and industry awards:
Royal Society for the Prevention of Accidents (RoSPA) – President’s Award
- Interserve Construction 2012, 2011, 2010,
- Interserve Engineering Services 2012, 2011,
- Interserve Defence 2009, 2008, 2007, 2006,
- Interserve Industrial Services 2005, 2004,
British Quality Foundation UK Excellence Award 2012 - Interserve Construction
The Queen's Award for Enterprise 2010 - RMD Kwikform
The British Safety Council – International Safety Award 2013 – Distinction – Interserve Industrial Services Limited
Interserve is a member of Constructing Excellence, The Business Services Association and Build UK.
On the 14 August 2006 the Company announced to the London Stock Exchange that accounting issues relating to the mis-statement of accounting balances within its former Industrial Services Division had been uncovered. The discovery of these accounting irregularities led to a write down in profits by £25.9m, including prior years (see section 3 Financial Information), and six senior managers were suspended with the company stating that accounting mis-statements dating back "several years" had been uncovered following changes in the organisation. The Daily Telegraph reported that 'an investigation had discovered that controls in the division involving work in progress were, in the words of Lord Blackwell, chairman, "repeatedly evaded over several years in what appears to have been a concerted effort by certain divisional managers to over-state divisional results." He added that the board was concerned that the deliberate nature of the evasions had gone undetected for so long despite internal and external audit scrutiny.'
Office of Fair Trading investigation
It was announced that in April 2008 the Company became subject to an investigation by the Office of Fair Trading (OFT) under the terms of the Competition Act The investigation was described by the OFT as "one of the largest ever Competition Act investigations" and a total of 112 firms in the construction sector in England were implicated. On the 22 September 2009 the OFT concluded that Interserve subsidiary Interserve Project Services Limited had engaged in illegal anti-competitive bid-rigging activities and imposed a fine of £11,634,750
A case was brought by three claimants who were scaffolders and shop stewards, against subsidiary company Interserve Industrial Services Limited (IIS) at an Employment Tribunal. IIS and the claimants trade union, UNITE, were party to a collective agreement that provided for the Company to “undertake as far as is practicable to place onto an appropriate contract an NECC accredited senior steward”. A union representative therefore contacted a manager for the Company and advocated the employment of the claimants on a contract awarded to IIS. The manager decided on the basis of the contact with the union representative not to recruit any of the three claimants. The claimants contended that a deliberate decision had been made not to recruit them because of their union activities and that their names had been blacklisted by the Company. The Tribunal ruling supported the IIS evidence that the union tried to bully the Company’s manager into employing the three men, acted in a combative manner which was resented and that the Company did not want to be dicated to about whom to employ. The judgement was subject to an Employment Appeal Tribunal where the ruling was upheld in Interserve’s favour.
Notable construction projects
The Company has been known as Interserve Plc since 2001. The corporate genealogy since foundation is as follows: