Interserve has decided to keep its equipment services business RMD Kwikform (RMDK) after a strategic review of the business.
The review of the formwork, falsework and ground shoring company, announced in February, included the possibility of selling it. The aim of the review was to see what would provide best value to shareholders.
RMDK contributed 32% of the group’s total operating profit in 2015.
A new five-point strategy for RMDK has now been outlined by Interserve, which will cost around £17M to implement. This includes strengthening market position where it has leadership through investment and operational excellence, driving digitisation, developing a market-leader position in ground shoring in the UK, investing in growth markets as well as core markets, and restructuring in some smaller markets.
“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,” said Interserve in a statement.
Interserve added that the medium-term outlook was for the business to deliver sustainable margins above 20%.