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Public sector outsourcing specialist, Serco Group, has beaten City expectations with a 33% increase in half-year profits. The surge by the public sector to find efficiencies has helped boost Serco's order book in the UK, and international deals with other governments also helped deliver good news. The firm shocked the Square Mile last week, not only with better-than-expected results, but revealed it had an ‘opportunity pipeline' of new contracts totalling £27bn. City analysts had predicted that the squeeze on public finances would lead to the public sector reducing its reliance on outsourcing firms to deliver services. But the firm revealed its order book was up £400m since December, with contracts worth £16.7bn confirmed. Serco's civil government division which handles UK public sector work in healthcare, IT, school inspections and consulting, grew its profits by 48% to £38m. One high-profile project announced this summer was confirmation that Transport for London had awarded the firm the £140m contract to create, build and run the cycle hire scheme which will be rolled out across the capital's streets. But the drive by both central and local government to create shared services and make greater use of IT will offer more opportunities for Serco. Christopher Hyman, chief executive, gave an upbeat assessment of the year so far, and of the company's future performance. ‘This has been a strong first half,' he said. ‘We were awarded a record level of contracts, entered a number of important new markets, and delivered a strong financial performance. ‘Given the economic challenges our customers are facing, they are making transformational changes and asking for our support in delivering high-quality, essential services while improving productivity. ‘These opportunities, across all our markets, and our growing capabilities, underpin our confidence in the future.'

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BUSINESS

33% rise as Serco profits from sector's efficiencies

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