Serco soars after its Carillion deal

SHARES in Serco surged after the outsourcing giant snapped up a large slice of Carillion’s healthcare division and said profits would hit the top end of targets.

The group said annual underlying trading profits are expected to come in at the peak of a £65m to £70m range, causing stock to climb 12pc in morning trading on the London Stock Exchange.

Serco also sealed a £47.7m deal to take over contracts from Carillion spanning five hospital trusts and 20 public sector organisations.

The move will bolster its UK healthcare business, which has revenues of £240m.

Chief executive Rupert Soames said it had been a good year for orders and he expects profits to grow strongly across 2018 and 2019.

Annual revenues are expected to be nearly £3bn, slightly down on last year, in response to currency movements, volume and timing effects.

It added that orders for the year would hit more than £3bn.

Serco employs more than 50,000 people across five sectors, including defence, justice and immigration, transport, health and citizen services.