Interserve has today revealed that the £160 million cost of exiting its troubled Energy from Waste (EfW) projects has resulted in a £94.1m loss in the company’s results for 2016.

The international support services and construction group was served notice of termination on its waste to energy contract in Glasgow in November due to delays and performance issues, before deciding to remove itself from the EfW sector.

The firm then announced last week that the costs associated with this are expected to be more than double the £70m it had projected in May 2016.

As a result, Interserve has today reported a headline total operating profit of £124.2m (2015: £145m) and a headline pre-tax profit of £106.5m, but the resulting before-tax figure was a loss of £94.1m (2015: £79.5m profit).

Excluding the problem at the waste business, UK construction suffered a £3m operating loss due to challenging market conditions and several underperforming contracts.

Chief executive Adrian Ringrose said that 2016 was a mixed year for the group.

He said: “We delivered a strong cash performance and the majority of our businesses performed well.

“However, the performance of our UK construction business was disappointing, and we are focussing our efforts on improving and re-shaping this business.

“Managing the challenges of exiting from the Energy from Waste sector remains a significant priority.”

Mr Ringrose added: “As previously announced, we have increased the exceptional provision for exiting this market and the associated contracts to £160m.

“We expect to complete substantially all of the construction and commissioning of the projects during 2017, although our contractual obligations in respect of warranties, and the resolution of claims will continue for a period thereafter.

“Managing the challenges of exiting from these projects and of pursuing our entitlements to recoveries and claims from third parties remains the focus for the large, experienced team of commercial, operational and legal experts we have deployed.

“It will remain an area of critical focus for the foreseeable future.”

Interserve reported a future workload of £7.6bn, with particularly strong growth in international construction.

Though growth from international businesses was offset by a modest decline in UK support services was due to delays in government procurement around the 2015 General Election and Brexit uncertainties.

Mr Ringrose added: “Despite the increased uncertainty following the UK’s EU referendum, our outlook for the current year remains positive. This, together with our strong market positions and healthy future workload, underpins the board’s confidence in our medium-term prospects.”