(Alliance News) - Serco Group PLC on Tuesday said it has been awarded two contracts by the UK government Department for Work & Pensions as part of the Restart programme, has completed the acquisition of Whitney, Bradley & Brown Inc and updated its 2021 guidance.
Serco is a Hampshire-based company that provides outsourcing services to governments.
Serco said the Restart programme will help people in the west central region and Wales who have been unemployed for between 12 and 18 months get back into work, including those who have been impacted by the Covid-19 pandemic.
The company said it estimates that the combined value over the initial four and a half-year contract period will be around GBP350 million, dependent on the number of people who find employment. It expects delivery on the contract to start in June.
"Serco has extensive experience and a proven track record in employment services, and in managing teams of expert partners, including small companies and charities, who will work with us to achieve positive outcomes both for individual job-seekers and the UK economy more generally," said Chief Executive Rupert Soames.
Additionally, Serco has completed the acquisition of Whitney, Bradley & Brown from an affiliate of Miami, Florida-based private equity firm HIG Capital for USD295 million. First announced back in February, Serco said the sale will increase the scale, breadth and capability of its North American defence business and will give it a "strong platform from which to address all major segments of the US defence services market."
As a result of the acquisition, Serco has updated its 2021 guidance to take account of eight months of financial contribution anticipated from WBB and the initial losses expected on the Restart contract.
It now expects revenue of GBP4.3 billion, up from GBP4.2 billion as stated in February and up from GBP3.9 billion in 2020. Serco said 2021 underlying trading profit is predicted to be GBP185 million, an increase from the guided for figure of GBP175 million in February and up from GBP163 million in 2020.
Shares in Serco were up 2.6% at 145.10 pence in London on Tuesday.
By Zoe Wickens; zoewickens@alliancenews.com
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Serco (SRP)