Serco warns of more challenging times ahead

Outsourcing group Serco today reported a 6 per cent fall in annual profits as it counted the cost of lost UK government contracts and said the outlook for the year ahead was “challenging”.

The firm, which last week named Aggreko boss Rupert Soames as its new chief executive, said its adjusted pre-tax profits fell to £254.4 million in 2013, down from £271.6m a year earlier and just below City forecasts of £257m.

Acting chief Ed Casey said Serco – which was temporarily barred from bidding for government deals following a row over tagging criminals – had been through a “difficult year” and much work remains to be done to rebuild trust in the group.

Casey, who will hand over the reins to Soames in June, added: “Whilst the group has a challenging near-term outlook, and successful delivery of corporate renewal is required, our position should be restored to one of strength in what remain large and growing markets.”

Serco’s board proposed holding the final dividend at 7.45p a share, to be paid on 14 May.