28th Jun 2021 09:45
(Alliance News) - Serco Group PLC said Monday it has won a Covid testing centre contract in the UK worth up to GBP322 million.
The outsourcer was awarded the contract by the UK Department of Health & Social Care to continue providing support services to Covid-19 regional, local and mobile test centres in England and Northern Ireland.
The contract, awarded after a process run by the DHSC and the Crown Commercial Service, is for 12 months with an option to extend for a further 6 months.
"The value of the award could be up to GBP322 million, although the actual amount could differ materially from this as the contract is designed to be flexible, matching services to the demand for testing over the coming months," Serco added.
Serco will provide test site operations, asset administration support, cleaning and security services at around 20% of sites in England and Northern Ireland.
Serco Chief Executive Rupert Soames said: "We are proud of the part we have played in building and operating the UK's highly successful Covid-19 testing infrastructure.
"From a standing start in March 2020, NHS Test & Trace has grown a network of regional, local and mobile sites which have delivered over 18.5 million individual tests, an average of 51,000 tests a day. We are delighted that the DHSC has selected us to continue to support them in providing these services for at least the next twelve months."
Soames added that the new contract is unlikely to increase profits beyond previous guidance set out earlier this month.
On June 14, Serco said it expects underlying trading profit to hit GBP200 million this year - GBP15 million more than previously forecast due to the extension of Covid-19 restrictions.
In 2020, underlying trading profit was GBP153 million.
Serco has faced criticism over the large profits it has made from the pandemic and its decision to start paying a dividend to shareholders.
UK opposition Labour leader Keir Starmer said in February it was "outrageous" that dividends would be reintroduced this year.
He tweeted at the time: "Taxpayers' money shouldn't be given to Serco's shareholders via dividends.
"The government should have placed Test and Trace in the hands of our NHS and local communities."
But Serco has defended its role, pointing out that it repaid previously claimed furlough cash and shared a GBP5 million bonus among 50,000 frontline workers.
Bosses previously revealed they banked GBP400 million in extra revenue from Covid-19-related services, although profits from the pandemic were minimal – at GBP2 million. They also noted that other services provided by Serco to parts of the economy that had shut were hurt.
Shares in Serco were 1.4% higher in London on Monday morning at 133.30 pence each.
By Paul McGowan; [email protected]
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