Financial News

  • 5 March 2014, 8:06

Serco Braces For Tough 2014 As Profits Fall

Serco has reported a 6% fall in annual profits following a year which saw it embroiled in a government contracts scandal.

The firm, which agreed last December to repay the Government 68.5m for overcharging for the tagging of convicted criminals, warned that 2014 was also likely to be tough.

Serco last Friday named Aggreko chief executive Rupert Soames as its new boss in the wake of a series of profit warnings and high-profile resignations.

It said that 2013 adjusted pre-tax profit fell to 254.4m - a figure slightly below analyst forecasts of 257m.

Its share price fell 3% in early trading on the FTSE 100 on Wednesday.

Serco had already warned that restructuring costs - taken to help try and win back Government trust - would drive profits lower in 2014.

The company said its order book was worth 17.1bn - down 2bn on a year ago - though it has been granted permission to bid again for new Government business so long as its reforms remain on track.

Adjusted net debt for 2013 grew 21% to 701m due to heavy exceptional charges, although the group said it still had sufficient financing headroom.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.