Serco upgrades its 2022 profit outlook despite COVID-19 contract ending
Outsourcing giant Serco increased its 2022 profits outlook despite the end of its COVID-19 test and trace contract with the United Kingdom (UK) government.
The firm said that they are expecting a trading profit of around £225 million (US$284 million) this year — up £30 million (US$37 million) on the previous projection — which would help offset the effects of the conclusion of the contract.
Serco CEO Rupert Soames said, “We have had a strong start to the year, and it is pleasing to be able to increase reported profit guidance to levels approaching last year’s.”
He added, “To deliver this outcome, we are having to replace with other work some £500 million (US$632 million) of revenues and over £60 million (US$75 million) of contract profits from the ending of Test & Trace and the AWE (Atomic Weapons Establishment) contract.”
Serco’s full-year revenues are expected to reach £4.3 billion to £4.4 billion (US$5.44 billion to US$5.57 billion), in line with the previous year.
The group said in the UK and Europe, it expects turnover to drop by around 5% year-on-year to £1 billion, even after the end of test and trace blow. The firm also noted that they are “well-protected” against soaring inflation.
