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Outsourcer Serco to provide £9m cash boost to workforce

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Circo reported revenue rose 1% to £2.18 billion for the half of June 30 (Ian Nicholson/PA) (PA Archive)

Outsourcer Circo is to hand over £9 million in one-time payments to around 45,000 non-management employees as the firm has withdrawn its profit guidance and dividends.

Shares of the company, which runs security, transportation and immigration contracts, moved higher on Thursday after outperforming expectations over the past six months despite pressure from employees.

Serco reported that revenue for the half-year on June 30 rose 1% to £2.18 billion compared to the same period last year.

This came despite significant revenue losses from Britain’s test and trace services, highlighting it is set to impact £480 million in the current year from lower demand for COVID-19 contracts.

The owners said revenue for 2022 could fall slightly to £4.3bn, down from £4.4bn last year.

The group said the act of keeping a lid on costs helped it secure a 6% increase in profits to £123 million in the latest six-month period.

However, profits are expected to be lower in the second half of 2022 due to higher costs, including higher employee salaries.

Group chief executive Rupert Soames said: “We are increasing salaries faster than our budget as a result of the recent surge in inflation and we will be distributing an additional £9 million in one-time payments to all of our partners in the coming weeks. External Management grades recognize the pressure many people, especially those with low pay, are subject to at this time.

“Rising salaries are one reason why costs are expected to be higher, and profits are lower in the second half than in the first.”

He said it has seen a decrease in vacancy levels since last year, but highlighted that “some contracts have higher staff turnover” and that the pandemic-related unexpected absenteeism levels “mean the business’s operational management.” Very demanding”.

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