8th Nov 2024 09:46
(Alliance News) - Serco Group PLC on Friday said it has been unsuccessful in renewing its contract for the provision of immigration services in Australia.
Serco is an outsourcer based in Hampshire, England. It focuses on defence, justice & immigration, transport, health and other facilities management and citizen services.
Shares in Serco were down 10% at 159.16 pence each in London on Friday morning.
The contract with the Australian government's Department of Home Affairs was for the provision of onshore immigration detention facilities and detainee services. Its current contract is due to end on December 10, after which there is a transition-out period of up to 180 days.
If the contract had been retained, Serco would have expected it to contribute around GBP165 million in revenue for 2025 and GBP18 million of underlying operating profit.
Serco said its full-year guidance for 2024 remains unchanged, which it set at around GBP270 million of underlying operating profit and GBP4.8 billion of revenue at the time of its half-year results release in August. This would represent an 8.1% growth in underlying operating profit from GBP249 million last year, and a 1.4% fall in revenue from GBP4.87 billion.
It also cited a company-compiled market consensus of GBP4.9 billion in revenue for 2025 and GBP282 million in underlying operating profit, which would represent a 4.3% increase in profit from the 2024 forecast, and a 2.1% growth in revenue.
Serco said: "Our performance levels have been high on the current contract, and we submitted what we believed to be a compelling bid that would have delivered continued strong performance to the Australian government as well as meeting our framework for achieving margins appropriate for the services we deliver. We will now work to ensure a smooth transition of these critical services to the new provider."
By Emily Parsons, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.