Serco boss vows come-back at scandal hit firm
The head of British outsourcer Serco said he is confident he can restore the fortunes of the firm after a disastrous first half of the year when profits plunged 59pc.
Last September the National Asset Management Agency was forced to cancel a multi-billion euro contract to manage €1.8bn of loans after Serco was accused of fraud by UK authorities.
Yesterday Serco reported lower-then-expected debt and the company stuck to its 2014 profit forecast - a rare event after three downgrades. But it warned the guidance depended on it cutting costs, fixing failing contracts and uncovering no further problems.
Serco's share price has almost halved over the past year after it was hit by a six-month ban on new UK government work in July 2013 for overcharging on a tagging contract. A raft of other deals have hit problems, forcing the firm to raise cash and begin costly reviews and restructuring.
Chief Executive Rupert Soames, a grandson of former UK prime minister Winston Churchill, joined from Aggreko in May to lead a recovery. He has overhauled management and launched a review of Serco's strategy and contracts.
He says maintained guidance and debt reduction provided some grounds for optimism for the company, which runs services from prisons to air traffic control centres.
"We have a lot of work to do, but I am confident that, in time, we can restore the company's fortunes," he said. (Additional reporting Reuters)