Government contractor Serco on Thursday defied the recent gloom in Britain’s outsourcing sector and stuck to upgraded profit forecasts.
Chief executive Rupert Soames, who is leading a turnaround of the FTSE 250 firm, said it had had a strong 2018 after “reducing our costs, stabilising revenues, and winning a number of important contracts”.
He hailed a number of large international contract renewals that boosted the business, including work worth £75 million to provide support for the Australian Defence Force’s military base in the Middle East.
The outsourcer said underlying trading profit in the year to December 31 will increase 30%-40% to between £90 million and £95 million, and rise further next year. That is up from guidance of £80 million at the start of 2018.
The City cheered the news, with shares up 6.9p, or more than 7%, to 96.3p.
Serco’s rise comes despite a difficult year for the sector with Carillion’s collapse and Interserve seeking a rescue deal.
Soames said the Government is “beginning to get tough with suppliers that don’t pay subcontractors on time”.
