After raking millions in the highly-criticized Test and Trace scheme and other Covid contract revenues, Serco is sure to surpass profit projections.
Outsourcers said that the tough second wave of infections and other high-infection rates this year led to more work for pandemic related projects in Australia and the UK.
Serco runs 25 per cent of Covid testing centres and around half of contract tracing operations in the UK – but has been falsely described as one of the groups that designed the overall scheme and its app.
Profits: Serco said the gruelling second wave and other spikes in infections this year meant its pandemic-related work in the UK and Australia went on for much longer than expected
The FTSE 250 group said in a surprise trading update that it will make profits of at least £225million in 2021.
This is the third time it has raised its profit estimates – rising from previous forecasts of £200million and far ahead of the £163million the company made in 2020.
Turnover is expected to rise to £4.4billion, from guidance of £4.3billion.
This will mark the second consecutive year of turbocharged growth at Serco as a result of the pandemic.
Rupert Soames was criticized last year for the first dividend since 2014. He had received hundreds of million of pounds through the failed Test and Trace scheme.
The programme launched in May 2020 but took months to work effectively – with many saying it hindered attempts to control the pandemic.
Critics said taxpayers’ money should not be spent on payouts to Serco’s shareholders, with Labour’s deputy leader Angela Rayner previously saying Serco and other outsourcing groups were being ‘rewarded for their failure’.
Serco received around £350million for its Test and Trace contracts in 2020 – a fraction of the £22billion the scheme was thought to cost during that financial year.
Covid’s huge profits are unlikely to continue. The company admits that they were a one-off. It still expects revenues to reach £4.2billion and profits of £196million.