Serco finds state of ‘grace’ after scandals

The company said results marked 'good progress' in the first year of its turnaround plan

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The Independent Online

Serco has fought to get back “in the good graces of the Government”, its chief executive Rupert Soames said as he unveiled better than expected annual results at the scandal-hit outsourcer. 

Pre-tax losses for 2015 narrowed dramatically to £64.9m from £990.5m the year before, on revenues of £3.5bn, helped by Serco’s  departure from some unprofitable contracts. Net debt also fell by £605m to £78m, in part due to a £555m rights issue last year. 

The shares, which have fallen more than 80 per cent since 2013, leapt 15 per cent to 94.35p following the update.

Mr Soames, who is the grandson of Winston Churchill, invoked another war-time leader when he said that the recovery plan had “survived first contact with the enemy. However, to paraphrase the Duke of Wellington at Waterloo, we know much hard pounding lies ahead.”

The company said the results marked “good progress” in the first year of a turnaround plan following a spate of controversies. 

Last July the New Zealand government took control of a corrections facility run by Serco, after evidence of a “fight club” within the prison walls emerged. In 2013 it admitted it had charged the UK Government for tagging criminals who were dead, imprisoned or non-existent.

Mr Soames, who took the helm in 2014, said: “We made some serious mistakes. We have atoned for them and we think we are now back in the good graces of the Government.”