Finances warning for new Serco boss
The new boss due to take the helm of troubled Serco has been told that the private security firm is in a worse state than originally thought.
A review of the company's performance ahead of the arrival of Rupert Soames as chief executive on Thursday has found that the FTSE 250 Index firm is facing the need for a material downward revision to profit forecasts.
Shares slumped by another 18% today after last night's warning and revelation that the company is in talks with shareholders over a potential City fundraising in order to strengthen its balance sheet.
Serco, which provides outsourcing services to public sector customers, said conditions so far this year have been more challenging than expected.
In March, it reported a 62% slide in annual profits as it battled a ''material loss of momentum'' in its business following a scandal-hit year.
Serco was forced to refund the Government £68.5 million for overcharging on criminal tagging contracts, as well as repay £2 million of past profits from a prisoner escorting contract.
It is now clear to resume bidding for public sector contracts and has appointed Mr Soames, the respected former boss of temporary power firm Aggreko, in the hope of boosting its corporate renewal plan.