News on 1 September 2000

Management services provider Serco reported pre-tax profit up 20.6% at £18.6m on turnover 16.2% higher at £454.9m for the six months to June 2000.

"We are on track for another good year and are confident of sustaining our strong record of performance in the forseeable future," said Richard White, Executive Chairman. He ascribed his confidence to Serco’s continued success in winning new business while extending and broadening existing contracts.

This year in the UK Serco has phased-in three major contracts: the management
and operation of the Atomic Weapons Establishment (AWE), the newly-built Ministry of Defence Joint Services Command and Staff College (JSCSC), and an infrastructure maintenance contract for Railtrack.

The company claims to retain over 90% of contracts up for renewal, including Doncaster Prison and the Defence Procurement Agency in Abbey Wood. Serco is also negotiating a two year extension to its contract to manage the National Physical Laboratory (NPL).

Serco is a bidder for the controversial National Air Traffic Services PPP, with best and final offers to be submitted in January next year.

Serco extended its facilities management contract with the stainless steel company Avesta Sheffield at its Wales location, after successfully growing the contract since 1992. In New Zealand the company extended its contract to provide property maintenance and building services at 4,000 sites for Telecom New Zealand, the country’s largest business. This contract has grown to include Telecom’s preventive maintenance programme, and in the past two years Serco has earned substantial incentive payments for achieving cost savings.

Serco’s new contract wins in the UK include a 10-year contract to develop a strategy for the National Crime Squad’s information management and communications needs; plus another 10-year contract to manage the Manchester Aquatic Centres - built to host the Commonwealth Games in 2002 and to provide a community legacy.

Overseas Serco began a new contract for CONSOB, the National Commission that oversees the Italian Stock Exchange and public companies. Serco is supporting CONSOB’s entire IT infrastructure for 450 employees at two offices in Rome and one in Milan. In Germany, Elekluft – acquired in September 1999 and renamed Serco GmbH & Co. KG – is supporting the first of two new high-tech contracts at the EuropeanSpace Research and Technology Centre in the Netherlands.

In January Serco began a facilities management contract with Microsoft, covering a wide range of services in the company’s 11 Dublin premises which include its European operations and product localisation centres.

RV Triton the revolutionary trimaran that will be used to test the triple hull concept for future Royal Navy warships. Serco has the contract from DERA to crew, operate and maintain the vessel.

Richard Byatt