Support services outsourcer Serco has pushed on with increasing the amount of work it does overseas as the UK market stagnates, with a new billion-dollar contract win in Australia.
The firm has been tasked with providing healthcare for around 80,000 members of the Australian army for the next six years, in a deal worth 1.01bn Australian dollars (£560m).
But this could rise to 1.68bn Australian dollars, around £933m, if four one-year extension clauses are activated. Serco is acting as subcontractor to health giant Bupa via its Australian subsidiary.
“We are very excited to be supporting Bupa and the Australian Defence Force in delivering these essential services,” said chief executive Rupert Soames. “Our solution draws upon Serco's international experience and expertise in workforce management.”
Serco has been pushing to expand its presence overseas under Soames' watchful eye 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.
Today’s contract will see Serco assume its new responsibilities on 1 July.
Serco delivered a confident trading update late last year forecasting a 30-40 per cent increase in underlying profit for the year, despite the gloom that is gripping its rivals.
The company predicted profit in the range of £90 to £95m, it upgraded its earnings per share forecasts for 2019 and said its leverage and net debt was lower than expected.