Serco hit by profits alert

eMBattleD private security giant serco saw its shares lose more than £430m of their value after saying profits could be a fifth lower than expected.

the stinging profits warning, its second in the space of three months, came as it was given the all-clear by Government to bid for future work.

But the good news – which comes after a series of botched contracts including charging taxpayers for tagging dead criminals – was not enough to stem falling profits.

the group flagged problems including forfeiting profits from its prisoner tagging contract and changes to its australian immigration arm in November’s profits warning.

Yesterday it reiterated that those had not gone away – and added that its litany of government contract blunders could still have a ‘negative impact’ on annual performance.

‘consensus for operating profit is currently £277m,’ it said. ‘Given these factors, we anticipate a result that could be 10-20pc lower than this.’

shares fell 17pc to finish 86.3p lower at 423.2p.

the group has lost £1.2bn from its value since the scandal of prisoner tagging first broke last summer.

the following upheaval saw a raft of executives leave, as well as relegation from the Ftse 100 index.

serco said it now expected to compete with rivals for work such as the Northern Rail franchise extension and a defence contract expected to be awarded in February.