Serco's annual profit beats market expectations

Serco, which runs leisure centres in Shropshire and operates waste services in Sandwell, was boosted by coronavirus-related contracts, acquisitions and a recovery in leisure and transport contracts.

The company, one of the suppliers supporting Britain's Covid-19 test-and-trace programme, said underlying trading profit was £229 million for the year ended December 31, topping analysts' average expectations of £223 million. Meanwhile, revenue grew by 14 per cent to £4.4 billion.

The board declared a dividend of 2.41 pence a share for the year, up from 1.40 pence for 2020, and said it was launching £90 million share buyback program.

Rupert Soames, Serco chief executive, said: "This was a year in which Serco delivered an outstanding financial and operational performance across the world in the face of constant challenge and disruption.

"Being a contract manager or team leader, responsible for the daily delivery of vital public services, is never an easy job, but 2021 was the toughest operational environment I have seen.

"Around the world shortages of every type of skill – HGV drivers, prisoner escort officers, engineers, welders, porters, IT staff to name a few – customers eager to restore services, and large numbers of unplanned absences as Omicron spread all made operational delivery incredibly stressful.

"I want to pay tribute to the resilience, the skill and commitment of not only the front-line colleagues, but also of their line managers, for many of whom 2021 has been a year of relentless pressure.

"The strong financial performance enables us to deliver all aspects of our capital allocation strategy: investing in the business to drive growth and efficiency.

"We have had a strong start to 2022, with order intake of over £600 million and trading consistent with our full-year guidance."