Serco reports half-year loss of £7.3m as Angus Cockburn is made new finance chief
Serco has reported a first-half pre-tax loss of £7.3m, in the wake of a scandal surrounding the company’s use of electronic tags on prisoners.
In the same period last year the outsourcing company reported profits of £106m.
The company also announced this morning the appointment of Angus Cockburn – currently Aggreko’s interim chief executive – as their new chief financial officer from October onwards.
Cockburn will be joining a company that has announced half-year reductions in operating profit margins, from 2.1 per cent compared to 5.7 per cent last year, and a 4.5 per cent reduction in revenue to £2.4bn.
Serco has suffered since it was found to be overcharging the government by tagging criminals who were either dead or in prison. It was forced to repay £68.5m to the taxpayer, and was temporarily barred from bidding on government contracts.
The company is still suffering as a result, and as recently as June lost out on its bid to continue operating and maintaining the Docklands Light Railway, after 17 years of working on the line.
In April the company issued their third profit warning within three months.
In reaction to the first-half year results, Serco CEO Rupert Soames said:
As expected, trading was poor in the first half. Profits were in line with our revised expectations, and cash flow and net debt were better.We are making good progress with our Strategy Review, and in rebuilding trust and confidence with the UK Government.Many challenges remain, and we have a lot of work to do, but I am confident that, in time, we can restore the Company's fortunes.