Interserve has decided not to sell its Equipment Services business following an eight-month strategic review of the division.

The business, which trades as RMD Kwikform (RMD), will instead be developed and restructured to "best maximise value creation for shareholders".

In a statement, Interserve said: "Through the strategic review, the Board has concluded that we remain the best owner for RMDK and that retaining RMDK as a core part of the Group, with an updated strategy, best maximises value creation for shareholders.

"RMDK is a global market leader solving complex engineering problems for its customers, through the application of world-class design and logistics capabilities, backed up by an extensive fleet of specialist equipment. RMDK contributed 32% of Group total operating profit in 2015."


Features of RMDK's new strategy include strengthening its market position, utilising new digital technologies, developing a "leading position" in ground shoring (initially in the UK), investing in growth markets and restructuring operations in smaller markets.

Interserve said: "The business has a track record of attractive growth (8% CAGR over the last 15 years), is highly cash generative through the cycle and produces excellent returns on capital employed (20% in 2015). It is a global business, providing an important element of diversification to the rest of the Group's predominantly UK-based earnings profile.

"Whilst 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 above 20%, as we have previously guided."

(LM)