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10 March 2014 | Will Green
Serco has announced a 47.1 per cent drop in operating profit in the firm’s latest results.
Profit fell from £272.2 million in 2012 to £143.8 million in 2013 against the background of a “difficult year” that saw scandals emerge around a number of its contracts with the UK government, including offender tagging and prisoner transfer services.
The firm was ordered to undertake a period of “corporate renewal” by the government and its chief executive stood down in October 2013.
Ed Casey, acting group CEO, said: "We have been through a difficult year and there remains much to be done to ensure the agreed programme of corporate renewal is successfully implemented. However, the work we have completed and the undertakings we have made demonstrate our commitment to achieve this.
"The events of 2013 absorbed management's focus and, therefore, interrupted the normal process of improving efficiency and developing our business into new areas. Over the second half of 2013 and until the end of January 2014 we were not able to be awarded new contracts by UK central government, which also had an impact on the development of our business in certain other sectors.”
The annual results show revenues grew 5.6 per cent to £4.3 billion in 2013, while earnings per share fell 60.1 per cent to 19.51p.
Casey said he was confident Serco would “return to growth in what remain fundamentally attractive service markets around the world”.
The firm recently announced that Rupert Soames had been appointed group chief executive with effect from 1 June on a pay package of £1.1 million plus bonuses. He is currently group chief executive at Aggreko, the world’s largest temporary power generation and temperature control services business.
Soames said: “I am aware that the company has experienced significant recent difficulties but the work that Serco does is important to the lives of millions of people and I believe that we can find a way through to a bright future.”