1st May 2014 12:55
LONDON (Alliance News) - Serco Group PLC Thursday said it had raised GBP160 million through the placing of 49.9 million new shares at 320 pence each, in order to complete a strategic review whilst remaining within the terms of its debt facilities.
Shares in Serco were trading 0.74% lower at 337.6 pence Thursday afternoon.
After the market close Wednesday the outsourcing firm reduced its full-year group revenue expectations by GBP200 million on a reported basis as the firm's performance for the year-to-date has been "weaker than expected."
Serco said that approximately half of its revenue is in non-sterling currencies and if the latest currency rates continue throughout the remainder of the year, it estimates that group revenue on a reported basis would be approximately GBP200 million lower.
While the company retains its expectations that adjusted revenue will be in the range of GBP4.7 - GBP4.9 billion at constant currency, internal forecasts show that revenue will be slightly - around 1% or GBP50 million - lower than previously thought.
The strategic review, which is already underway, is expected to take around nine months, said
Serco. It intends to present its conclusions with its 2014 full-year results.
On Monday the firm warned that it may have to revise its expectations lower after a more challenging 2014 so far and that it would consult with its shareholders regarding the possibility of strengthening its balance sheet through an equity placing.
In a separate announcement Wednesday the firm also said that Andrew Jenner, Group Chief Financial Officer of Serco since 2002, has formally advised the Group of his intention to step down from the Board and as CFO once there is a successor.
The sharp drop in the company's 2013 performance had been well flagged after it was banned from winning new UK government work in the wake of issues with two contracts. The company reported a pretax profit of GBP106.6 million, down from GBP281.1 million in 2012, even though revenues rose to GBP4.29 billion, from GBP4.06 billion.
By Alice Attwood; [email protected]; @AliceAtAlliance, additional reporting by Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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