UK's Serco posts stellar first-half on outsourcing demand from public sector

Credit: REUTERS/SIMON DAWSON

British outsourcer Serco reported a 53% jump in first-half profit on Thursday, benefiting from a strong demand for its services during the coronavirus pandemic and the acquisition of a U.S. naval systems unit last year.

Adds detail on results, background

Aug 6 (Reuters) - British outsourcer Serco SRP.L reported a 53% jump in first-half profit on Thursday, benefiting from a strong demand for its services during the coronavirus pandemic and the acquisition of a U.S. naval systems unit last year.

A focus on public sector services has sheltered Serco from the impact of the health crisis, with weaknesses in its leisure and transport businesses being offset by additional work in citizen services that provides back-office and IT work for governments.

"Covid-19 has had little effect on profits; although there have been some dramatic impacts, positive and negative, on individual contracts, in aggregate the "ups" on profits have balanced the "downs"," Chief Executive Officer Rupert Soames said in a statement.

The provider of defence, security, immigration, health and transport services for governments in more than 20 countries said underlying trading profit came rose to 77.6 million pounds ($102.24 million) from 50.6 million pounds a year earlier.

Revenue from COVID-19 related contracts amounted to about 130 million pounds, the company said, as it provided drive-through test centres in the UK and quarantine accommodation to travellers in Australia, among other works.

Before the pandemic took hold, Serco had declared its first dividend since 2014, but withdrew the move due to the uncertainties arising from the health crisis and said it would decide on the payout later in the year.

($1 = 0.7590 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Aditya Soni and Arun Koyyur)

((Yadarisa.Shabong@thomsonreuters.com; Twitter: https://twitter.com/Yadarisa; +919742735150;))

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