Rupert Soames, chief executive of outsourcing giant Serco, has joined packaging firm DS Smith as a non-executive director and member of its board.
The news buoyed the FTSE 100 packaging supplier’s shares, as the company expects to benefit from the businessman’s “hands-on experience of the UK plc environment.
DS Smith’s stock market value has suffered in recent months, slumping 31.6 per cent to 336p at yesterday’s close, down from 491.4p in October.
But shares jumped 3.4 per cent on the news, balancing out to 347.5p this afternoon.
Gareth Davis, DS Smith chairman, said: “I look forward to working with Rupert on the DS Smith Board and to gaining the benefit of both his operational and corporate experience. I am sure that he will make a very positive contribution.”
Soames, brother of Conservative MP Nicholas Soames and grandson of Winston Churchill, has headed up Serco since 2014, just as it issued a profit warning and announced it would seek £170m in emergency funding. He has since turned the company’s finances around – in December Serco forecasted a 30-40 per cent increase in underlying profit for the year, despite the gloom that is gripping its rivals Interserve and Kier Group.
Serco has also been pushing to expand its presence overseas for several years now, and 80 per cent of its £1.6bn of contract wins in the first half of 2018 were outside the UK.
City A.M. understands the firm’s directors still do not fancy the prospects of British outsourcers on home soil, more than a year on from the dramatic collapse of public sector contracting giant Carillion.
This comes despite last month’s news that Serco won its biggest ever contract – to provide a decades-worth of accommodation and support for asylum seekers in north west, the Midlands and the east of England – for £1.9bn.