Serco shares soar as Covid-19 business booms

SERCO, the outsourcer at the centre of a row over the NHS Test & Trace scheme, today said business is booming.

In an unscheduled trading update the company told the City that revenue for the year will be £3.9 billion, £200 million better than expected.

Profits could hit £165 million, also far better than the Square Mile had pencilled in.

The shares jumped 12% on the news to 133p.

“Sack Serco” has been a rallying cry of MPs and others angry at the perceived failure of Test & Trace.

Serco was today at pains to point out that it is merely one of five companies running testing centres. It doesn’t do the actual testing nor is it involved in the much-maligned phone app.

The company, led by Rupert Soames since May 2014, said: “There has been much comment on Serco’s role in the NHS Test & Trace programme, including suggestions that we are responsible for the whole programme and / or that we have failed in our obligations. Serco is proud to be playing a part in the NHS Test & Trace programme; we now employ, directly or indirectly, around 9,000 people supporting the programme.”

Serco employs 55,000 worldwide, of which 25,000 are in the UK.

The statement added: “Governments’ requirement for support services directly related to Covid-19 is likely to be ephemeral, and at some point (hopefully, for all our sakes, soon) will diminish.”

Serco says its “operational delivery has been outstanding”.

Its finances are in such good shape it may soon resume dividend payments to shareholders.

The company also runs immigration detention centres in the UK and Australia and has healthcare contracts in the US.

Critics of government policy claim it is “addicted” to outsourcing.

Serco believes that the strain on the public finances is such that governments are likely to continue pushing business to the private sector.

It said: “We believe that this imperative to provide more, and better, for less will become even more urgent in the years ahead, and to deliver those objectives governments will need the skills, resources, innovation and nimbleness of the private sector.”

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