Serco grows revenue for first time since 2013

Serco, which operates leisure centres in Shropshire and runs waste collection services in Sandwell, saw revenue rise 15 per cent in 2019, from £2.8 billion in 2018 to £3.2 billion.

Profit grew to £120.2 million, a 29 per cent increase on the year before, when it stood at £93.1 million, not including impairment charges from an Serious Fraud Office investigation.

The FTSE 100 group also increased its order book by £5.4 billion over the year, representing 170 per cent of annual revenues, and taking the firm’s total backlog to £14.1 billion.

Although Serco has been mired in challenges since 2013, enduring six years of losses during a period of pressure on the UK outsourcing industry which has seen the collapse of firms such as Interserve and Wolverhampton-based Carillion, December’s trading update predicted a long-awaited return to profit.

Shareholders were cheered by the news that Serco will likely turn a profit of £129 million and revenue of £3.2 billion, both up year-on-year.

Serco, which is run by Rupert Soames, the grandson of Winston Churchill, carries out jobs ranging from helping build Britain’s nuclear warheads to running immigration centre.

It also raised its full-year outlook for revenue and underlying trading profit and said it expects to top them in 2020, driven by new contract wins and better performance at its US and Asian businesses.

Last week the firm was awarded a contract to run two more immigration removal centres, despite being hampered by allegations of abuse at another such centre.

The £200 million contract, which was awarded by the Home Office, will see Serco run Brook House and Tinsley House centres near Gatwick Airport for eight years.

Mr Soames said: “All this indicates that we have finally achieved escape velocity, leaving behind the gravitational pull of past mis-steps, and gives the board confidence to recommend paying a dividend for the first time since 2014, which is an important milestone.

“We are immensely grateful to our committed and hardworking colleagues, our patient shareholders and our supportive customers who have helped us reach this point."