Interserve shares rose over 18% to 119.4 in early morning trading following the company’s latest trading update.
The construction and services company, which issued multiple profit warnings last year, forecasted better-than-expected operating profit for 2018 due to lower costs
In its latest update, the group insisted it was making good progress with 'Fit for Growth', the three-year programme launched by the new management team in October 2017.
'Fit for Growth' is focused on increasing the Group's organisational efficiency, improving group-wide procurement processes and ensuring greater standardisation and simplification across the business.
Improved operating profit
The board is confident that the cost savings identified will contribute at least £40-50m to group operating profit by 2020, with the in-year impact in 2018 estimated to be £15m.
As a result of the 'Fit for Growth' initiatives, operating profit for 2018 is now expected to be ahead of current market expectations.
Debbie White, Interserve's Chief Executive, commented: "The new management team, and the board, have been working to stabilise the business and provide a sound foundation to continue to serve our customers effectively, underpin our future growth and to restore shareholder value.”
She added: “This work has focused on managing the balance sheet, conducting a thorough assessment of the contract portfolio, and introducing new management disciplines, processes and cost controls under the 'Fit for Growth' programme."