Test and Trace boost for Serco
PRE-TAX profits at outsourcing giant Serco have skyrocketed thanks to official contracts such as NHS Test and Trace and handling asylum seekers.
They were up nearly 75 per cent to £179.2million while its full-year revenues for 2020 rose 20 per cent to £3.9billion.
Serco said that it can start paying dividends for the first time since 2014. It plans to pay 1.4p a share.
The outsourcer had considered paying out last year before the pandemic started but then did not feel it was appropriate after receiving government support. It has since repaid that cash.
The company added that it had also paid one-off bonuses worth a combined total of £5million to 50,000 frontline staff.
Although the coronavirus hit some parts of its business, it has benefited others.
Aside from NHS Test and Trace, it operates quarantine hotels in Australia, where it is seeing strong demand for its immigration services.
Serco got a boost from its contract to manage centres for asylum seekers for the UK Government becoming profitable after five years of losses, as well as strong growth from its contract with the US Federal Emergency Management Agency. Together, they and other contract wins more than offset losses caused by the pandemic in some parts of the business. Rupert Soames, Serco group chief executive, warned investors that having seen strong performance in recent years, that may start to slow.
He said: “After the dramatic growth of the last three years, we see 2021 as being a year of more normal rates of growth in revenues and profits.
“We expect revenues related to Covid-19 services to be much stronger in the first half than in the second.
“However, we have had a strong start to the year.”
Mr Soames was parachuted into Serco in 2014 with a brief to turn around the then distressed group’s fortunes.