Serco share price spikes as chairman Alastair Lyons stands down

 
Lynsey Barber
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Serco's chairman is standing down (Source: Getty)

Serco chairman Alastair Lyons has announced his intention to step down from the troubled outsourcing company which last week issued a profit warning and a £550m rights issue.

Shares in the company spiked 1.5 per cent higher at 215.10 pence per share as markets opened this morning and were largely flat at 212.072 pence per share ar pixel time.

Chief executive Rupert Soames credited Lyons with steering the company through a difficult period for the business.

"While I respect Alastair's decision, I want to put on record the fact that he has done an outstanding job stewarding the company through the travails of the last twelve months. Nobody could have worked harder or done more to get us to the point where we can now concentrate on building a solid future for Serco," said Soames, the former Aggreko boss who took up the new position in June.

Lyons' time at Serco has been characterised by a string of fiascos and profit warnings which were deemed "strategic and operational mis-steps" in Serco'sstrategic review and which he said took ultimate responsibility for.

Last week's profit warning was the fourth this year and the results of its strategic review, announced at the same time, found the group had diversified too much and focused too much on winning new business.

The firm was last year found to have been overcharging the government for electronically tagging criminals.

Lyons said:

Since the events of last year I have sought to stabilise Serco with strong new management and non-executive directors; a much improved relationship with the UK government; and clarity as to our strategic direction.

The "Contract and Balance Sheet Review", the reassessment of the group's future prospects, and the creation of the right capital structure are all necessary steps in putting Serco back onto an even keel and giving our new management team the basis for taking the company forward again.

The initial findings of the "Strategy and Balance Sheet Review" point to strategic and operational mis-steps at Serco for which, as chairman of the board since 2010, I take ultimate responsibility. It is also the right thing for Serco to select a new chairman, to take the helm for the future.

While colleagues have asked me not to resign, it has been my intention to step down once a new strategy and direction for the business were in place. I am, therefore, taking the necessary steps to ensure an orderly process for my own succession during the first half of 2015.

Once the board has appointed his successor, Lyons will leave in the first half of next year.

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