An NHS Test and Trace worker
(Picture: PA)Serco is preparing to live with Covid-19.
CEO Rupert Soames said today that around £60 million of profit linked to Covid-19 contracts is likely to disappear this year as governments around the world roll back controls.
The UK government this week announced an end to free testing and contact tracing. Outsourcer Serco has been a major beneficiary of the billions spent on NHS Test and Trace, a programme dubbed “muddled, overstated, [and] eye-wateringly expensive” by MPs last year.
Serco provided half of all non-clinical call handlers for contract tracing and ran a fifth of testing centers. The contract had already begun to wind down before this week’s announcement, with Soames saying Serco was providing just 600 contact tracers by December down from 13,000 in August.
Revenues from Covid-19 contracts around the world totalled £700 million last year, helping group income climb 14% to £4.4 billion. Serco expects the wind down of Covid contracts to put revenues at £4.1 billion and £4.2 billion for 2022.
Analysts at Davy said the forecast suggested Serco believes all the NHS business will fall away this year.
Soames said: “Crucially, our non-Covid business has continued to grow apace during the last two years of crisis, and we expect revenues and trading profit in a largely post-Covid 2022 to be, respectively, around 30% and 60% higher than in pre-Covid 2019.”
Profits were up by a third last year to £233 million and Serco announced a £90 million share buyback alongside a 15% hike in the final dividend to 1.6p.
Soames said: “This was a year in which Serco delivered an outstanding financial and operational performance across the world in the face of constant challenge and disruption.
“Being a contract manager or team leader, responsible for the daily delivery of vital public services, is never an easy job, but 2021 was the toughest operational environment I have seen.”
