AGM and Interim Management Statement
Date: 12 May 2009
Ahead of today's Annual General Meeting, international service company Serco Group plc (Serco) is issuing the following Interim Management Statement covering the Group's performance since 1 January 2009.
Serco has made a strong start to the year and is on track to deliver on expectations for 2009. We see significant opportunities in the current challenging economic environment to help our customers in the UK and internationally to deliver value for money services.
So far this year we have signed contracts with a total value of £1bn, and have been appointed preferred bidder for contracts valued at around £250m. We have developed new markets and models, and increased our presence in existing markets, both through new contracts and by expanding the scope and scale of existing contracts.
Our new business wins so far in 2009 include the formation of a new partnership with Guy's and St Thomas' NHS Foundation Trust, announced in January, to improve the Trust's pathology services and target the significant UK and international pathology market. The partnership has signed a contract with the Trust valued at around £250m to Serco over 10 years. In March, the UK's Ofsted announced that it had selected Serco to manage inspection services in the Midlands, with the contract valued at around £55m over six years. In the same month, the Australian Department of Immigration and Citizenship announced that we are the preferred bidder for a contract to provide immigration detention services at centres throughout Australia.
In existing markets, we have extended our UK electronic monitoring contract by a further two years to 2012, securing additional revenue of £70m, and expanded the scope of our integrated facilities management contract for Airbus on rebid, with the contract now valued at around £40m over four years. We have also renewed our contract, valued at £24m over two years, with the Abu Dhabi Airports Company to provide air traffic control and electronic engineering services. In rail, we have seen good passenger revenue growth in our UK rail franchises in the year to date.
Smaller and medium-sized contract wins continue to play an important role in our growth. Today we have published a Contract News Update on www.serco.com which gives detail on a selection of wins since 1 January.
We continue to see substantial new opportunities for growth across our business. These include in North America, where the integration of SI International continues to progress well, our appointment to two significant contract vehicles giving us the opportunity to compete for work under these contracts. Further detail on these is given in the Contract News Update.
Elsewhere, in the home affairs market, the UK government has announced plans to build a further five new prisons in addition to the two already planned to be built, and to market test two underperforming public sector prisons. Also in the UK, we anticipate a new market opening this year for contracts under the Government's Flexible New Deal initiative to support the long-term unemployed in finding, and remaining in, work.
We continue to have a strong funding position, as we reported at our annual results, and our substantial opportunities and significant order book support our confidence for the future.
Christopher Hyman, Chief Executive of Serco Group plc, said: "Our customers around the world are facing increasing challenges in delivering better services for their citizens in the current economic environment. We are well placed to help them, given our broad capabilities and the flexibility we have in deploying them to address our customers' needs. This potential, when combined with our significant pipeline of opportunities and our substantial order book, means we remain confident on our prospects for the future."