Outsourcing company Serco Group saw a 58 per cent jump in profit following a strong first-half, the Test & Trace provider told the market this morning
Revenue for the business rose to £2.2bn in the six months ending June 30, which grew 19 per cent over the last period. Underlying trading profit for the first-half was £123m compared to £78m a year ago for the group.
The Hampshire-based business said 17 per cent of revenue was generated by the government to support their response to the Covid-19 pandemic such as programmes like Test & Trace. Despite the income, executives at Serco expect to see a substantial reduction in coronavirus related revenue as a sense of normality is restored post-pandemic and hope ‘for all our sakes, the sooner the better.’
Rupert Soames, chief executive, said, “in the meantime, our job is to deliver great service and value to governments on these contracts while they are needed, and to wind them down in an orderly manner when they are not. “
Soames praised its customers for trust in the business thought the pandemic and added Serco’s ability to respond to sudden changes helped meet expectations.
Performing the best were the Asia Pacific, North America and UK & Europe divisions, which delivered significant growth for the company. Europe produced 70 per cent of all contracts for Serco and accounted for nearly half of total revenue.
Profit from acquisitions such as Whitney, Bradley & Brown, were also boosted.
Specialising in services such as defence, health, transport, and citizen services Serco announced its first interim dividend since 2014 at 0.8p.
Full year forecast remains unchanged for Serco, despite underlying trade profits expected to near £200m.
Stocks for the business were up three per cent today, following the latest market update.
Serco also announced they had expanded their team by a third within a year which helped keep up with demand post-pandemic and expect a strong performance to follow.