WET News

WN November 2017

Water and Effluent Treatment Magazine

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News+ After a spate of high profile water mains bursts, Thames Water set up an independent review to help reduce the risk of such events. P4 Onsite: Digital engineering Has the latest wave of simulation technologies opened the door for revolution in the water sector? P8-9 Insight: Filtration & screening Sand filtration has been applied to municipal and industrial water processes for 200-plus years. But, a lack of evidence means there is still confusion as to what the technology can achieve. P12-13 WET NEWS WATER AND EFFLUENT TREATMENT NEWS • • Group implements schemes to ensure its operating in 'profitable market segments'. Interserve acts to improve operating performance NOVEMBER 2017 Volume 23 • Issue 11 Owen Pugh Group collapses "Travelling around and getting to meet with teams from different companies, you pick up tips along the way which can make your working life a bit easier as well" Jason Barratt, Anglian Water. P6-7 S upport services and con- struction group Interserve is implementing a plan to enhance margin performance to industry norms. Debbie White, Interserve chief executive, said the group-wide performance improvement plan, Fit for Growth, involves a series of work streams aimed at address- ing "our operating model and the cost base of our operations, as well as ensuring that we are oper- ating in market segments which are both profitable and offer opportunity for growth". The group is also initiating a comprehensive contract review across both the support services and construction businesses. News of the plan came as Interserve issued its second profit warning in as many months, say- ing there "is a realistic prospect" it may breach its financial cov- enants. On October 16, the group's board was forced to issue a state- ment after media reports sug- gested that some of Interserve's banks had called in consultants. The statement confirmed it was "in constructive and ongoing discussions with its lenders". In its latest trading update, Interserve expected group operat- ing profit for the second half of the financial year to be half that reported for the same period last year. "Further to our 14th Sep- tember trading update, our trad- ing in the third quarter has seen a slowdown from that reported in the first half," the group said. In its UK support services activi- ties, the group highlighted con- tributing factors including the cost of contract mobilisations; and margin deterior ation driven by an inflexible cost base. In the construction business, Interserve has seen further dete- rioration in operating profit as challenging market conditions and cost pressures as well as operational delivery issues have continued to impact performance. The equipment services business is performing well and as antici- pated, the international support services business has started to improve versus the first half per- formance and in international construction a stable performance has been maintained. With regards to its exited Energy from Waste (EfW) busi- ness, Interserve said further pro- gress has been made on the EfW contracts in the quarter, but it has seen a slippage in the anticipated completion date for some of the deals. It anticipates that in addi- tion to the £160M provided in 2016, an additional £35M provi- sion is required and significant uncertainty remains on the timing of commissioning. White said: "Despite our chal- lenges, Interserve has a strong client base and many strengths as an organisation and I believe there is considerable potential for business improvement across the company. My team will focus on improving our margin perfor- mance in UK support services and ensuring good contract selection in UK construction, while reduc- ing our cost base across the company." T he majority of Owen Pugh Group has ceased trading, with the loss of more than 250 jobs, after administrators failed to find a buyer for the busi- ness. The Owen Pugh Aggregates business was continuing to trade in hope of a sale as a going concern. Cashflow problems that arose as a result of loss-making projects were blamed for the group going into administration. Its services i n c lu d e d c iv i l e ng i n e e r i ng, drainage and sub-structures, bulk earthworks, and plant hire. Grant Thornton's Christopher Petts and David Dunckley were appointed joint administrators. Petts said: "Upon our appoint- ment it quickly become clear that the civil engineering contracting arm of the business was not viable and further trading could not be supported. Also, key customers highlighted that the insolvency of the group had triggered con- tract termination clauses. In turn, due to the inter- dependency within the group on these large civil engineering contracts, there was a knock-on effect on the viability of the plant hire and drain services businesses." Apprenticeship Levy a 'ticking time bomb' D evelop Training, which provides apprenticeships for construction and utility firms, is concerned that two thirds of companies are failing to take up the Apprenticeship Levy offer. Chief executive officer Chris Wood said with a two-year time limit on accessing funding, firms were facing "a ticking time bomb" a¢er which the money they paid into the levy would be lost to the taxman. Wood was responding to a West London College survey that found only 32% of employers who qualify have used the funding. He said: "At a time when the country is suffering from serious skills shortages, it is worrying that businesses are missing out on an opportunity to train new and existing staff." Wood said: "There is evidence that employers don't fully under- stand the Levy, so while some may have weighed up the pros and cons before making a deci- sion, it's likely that others will be out of pocket because they didn't get to grips with it early enough. They really need to get help to navigate their way through the options because this is a tick- ing time bomb." "My team will focus on improving our margin performance in UK support services and ensuring good contract selection in UK construction, while reducing our cost base across the company" Debbie White, Interserve The full KESSEL DRAINAGE range now available direct from IPS Kessel Backwater Valves, Hybrid Drainage Systems and Lifting Stations, provide unrivalled cost effective, energy saving, and reliable property protection from internal flood through the sewer surcharge. We can provide design & specification assistance, Kessel accredited training, together with our first class service including next day spare parts delivery. For further details please contact our sales team IPS Flow Systems Tel: 0191 521 3111 www.ipsflowsystems.com

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