Serco 'on track to match full-year expectations' despite half-year profits fall
Outsourcing giant Serco has insisted it remains on track for full-year expectations despite seeing half-year profits plunge by 30%.
The group saw underlying trading profits drop to £35.3 million for the six months to June 30, down from £50.6 million a year earlier.
But it said the drop was expected as it came up against "challenging" comparative results from a year ago and stuck by its outlook for the year as a whole, sending shares up 3%.
Rupert Soames, chief executive of Serco, said: "Notwithstanding the well-flagged decline in profits compared with the first half of 2016, trading in the first half of 2017 keeps us on track to achieve our expectations for the full year, and represents an improvement in underlying trading profit on the second half of 2016."
The results come as Serco is facing a two-week long strike from its employees at four hospitals in London in protest at below inflation pay deals.
Serco cheered an "exceptionally" strong flow of orders, having secured its biggest ever contract in June after winning a £ 1.5 billion deal to run what will be Australia's largest prison.
The group has been signed up to manage the New Grafton Correctional Centre in New South Wales.
Mr Soames said the group's order intake was "striking" having increased to £2.4 billion after the Grafton contract, but added a note of caution as some of the firm's markets have become "markedly more unpredictable".
The group is in the middle of a turnaround following a string of profit warnings and the prisoner tagging scandal in 2013.
It wa s also hit in recent years by rising costs on a deal to provide accommodation to UK asylum seekers.