27 Nov 2003

Interserve Plc (Interserve) announced today that, following the completion of a review of operations, it is proposing to discontinue its activities in foundation engineering (piling) by closing its subsidiary, Westpile Ltd (Westpile).  Westpile is a self-contained business unit within Interserve’s Project Services Division, with an annual turnover of approximately £20 million.

Although Westpile is currently trading profitably, the highly cyclical and capital-intensive nature of piling operations does not offer Interserve prospects for sustained profit and cash flow generation in the medium to long term.

The impact of the proposed closure will be an Exceptional Charge of approximately £5.8m, which will be reflected in the 2003 full year results.  The cash impact is expected to be broadly neutral.

Interserve will issue a regular update on Group trading before entering its Close Period at the close of business on 9 January 2004.