12th Mar 2015 07:39
LONDON (Alliance News) - Outsourcing company Serco Group PLC on Thursday reported a massive pretax loss for 2014 as the group booked huge provisions against onerous contracts, forcing it to cut its dividend payout and to confirm its plan to launch a GBP555 million rights issue and a refinancing of its debt pile.
Serco said its pretax loss for 2014 was GBP1.35 billion, compared to a GBP108.3 million profit a year earlier. The loss was driven by a total of GBP1.31 billion in one-off provisions the company made in the year on asset impairments and other charges.
Revenue also ticked down for the company to GBP3.96 billion from GBP4.28 billion.
The provisions and loss mean Serco also scrapped its final dividend, meaning its total payout for the year is 3.1 pence from its interim dividend. In 2013, it paid 10.55 pence per share in total dividends.
Serco also said it would launch a GBP555 million, fully underwritten rights issue and will refinance its existing lending facilities in order to cut its gross debt pile by GBP450 million.
"2014 has been an extremely difficult year for Serco, and the magnitude of the provisions, impairments and other charges reflects the scale of the challenges we have had to face. However, there is a real sense that, having confessed our sins and in taking the punishment, we are now ready to start on the path to recovery," Serco Chief Executive Rupert Soames said.
"We have all we need: a good plan, strong management to execute it, and, following the successful completion of our proposed rights issue and refinancing, a balance sheet that is an appropriate foundation on which to implement our new strategy."
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Serco