18th Jun 2014 07:06
LONDON (Alliance News) - Serco Group PLC's new chief executive, Rupert Soames, Wednesday made his first move to stamp his strategy on the struggling company by taking closer control of the company's operations in the Middle East and Asia-Pacific, and saying it won't be bidding for a UK rail franchise with its current partner on that franchise.
In a statement, Serco said it would be restructuring its Africa, Middle East, Asia and Australasia operations as the current chief executive of the division, David Campbell, retires. Campbell had already extended his service beyond his planned retirement date, but will now retire at the end of 2014 after more than 20 years at Serco.
Serco said it will close the regional management office in Hong Kong, and the Middle East business and the Australia, New Zealand and Asia business will report to Soames and Chief Operating Officer Ed Casey.
"This change will simplify the management structure, reduce cost, and give our important growth markets in the Middle East and Australia greater visibility," Soames said in a statement. "I would also like to wish David Campbell a long and happy retirement, and thank him for his contribution to Serco's success over many years."
The news came as Serco said it had agreed with Dutch rail operator Abellio that they will pursue separate paths in respect of the new Northern Rail franchise in the UK. It said the decision was taken "given the individual strengths of each company's rail credentials".
In March, the two companies signed a 22-month interim franchise deal to keep operating the Northern Rail service on behalf of the UK government until February 2016. The tender process for a new longer franchise has just started.
Serco said the Merseyrail joint venture that the company also runs with Abellio and which runs until 2028, is unaffected by the decision.
Serco was last month selected to operate the Caledonian Sleeper service, and said it is currently evaluating options for a number of franchises, including Northern Rail and TransPennine Express.
On top of the current Northern Rail and Merseyrail joint ventures in the UK, Serco operates the Docklands Light Railway in London. Overseas, it operates the Dubai Metro and Great Southern Rail in Australia.
"Serco has established a strong track record of providing high quality and efficient rail services around the world. We evaluate each opportunity on individual merit, and focus on those where we can have a transformational impact," Soames said.
Serco shares were up 0.2% at 361.1 pence early Wednesday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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