MARKET REPORT: Serco soars as it defends Covid role

MARKET REPORT: Serco soars as it defends Covid role

MARKET REPORT: Shares in Serco soar after outsourcing giant brags about its ‘outstanding’ work on NHS’s troubled test and trace system

Shares in Serco soared after the outsourcing giant bragged about its ‘outstanding’ work on the NHS’s troubled test and trace system. 

In a bullish trading update, the FTSE 100 firm told investors it is prospering during the pandemic, and is on course to make a bigger profit this year than previously thought, as trading picked up. 

The firm, run by Winston Churchill’s grandson Rupert Soames, now expects to make a profit of between £160m and £165m this year, rather than £135m to £150m. Revenues are forecast to come in at £3.9billion, a £200m jump on the previous guidance, and it will look at whether it can afford to reinstate its dividend. 

The optimism was a tonic for investors and sent shares surging 16.6 per cent, or 19.6p, to 138p. 

But its glowing assessment of the role it has played in the troubled NHS test and trace system may be viewed as a little too rose-tinted – and tin-eared. 

The firm said the fact that it had been awarded extensions to its multi-million -pound contracts to provide test centres and call handlers for test and trace ‘is an indication of our customer’s satisfaction with the quality of work we have delivered’. 

And it hit back at ‘suggestions that we are responsible for the whole programme or that we have failed in our obligations’. 

It employs around 9,000 people directly or indirectly to help manage around a quarter of the UK’s 500 testing sites, and track down those identified as having been in contact with people who have tested positive for the virus. 

Serco stressed it is not involved in the design and management of the programme, the NHS app, the IT systems, the booking of tests, the provision of test kits, laboratories, delivering results or the identification of contacts of people who have tested positive. 

It insisted its ‘operational delivery has been outstanding’. 

You know things are not going too well for a company when a £20m fine from the data watchdog is arguably the best news it had all week. British Airways was served with the penalty yesterday for a massive data breach in which hackers infiltrated its IT systems in 2018 and made off with the personal information, including card details, of 400,000 customers. 

The Information Commissioner’s Office had been planning to hit BA with a record £183m penalty but took into account pleas from bosses about the economic impact of the Covid-19 crisis. 

After the reprieve, BA-owner IAG climbed 0.02 per cent, or 0.02p, to 95.78p on fears about rising infections and further restrictions on travel. IAG has lost more than 60 per cent of its value since the start of the year, as the coronavirus crisis has grounded planes and devastated the travel industry. 

Markets across Europe staged a tentative recovery after falling earlier in the week over fears new restrictions to contain the spread of the virus will hammer the economy. The FTSE 100 edged back towards 6,000 having hit the psychologically important barrier last week. It closed up 1.49 per cent, or 87.06 points, at 5919.58. 

The biggest blue-chip riser was Rolls-Royce, which secured a £2bn debt lifeline from investors on Thursday. Shares surged more than 13.7 per cent, or 26.8p to 221.9p. 

The finance chief of Superdry has stepped down at the fashion retailer. Shares rose 0.2 per cent, or 0.3p, to 151.4p after Nick Gresham departed after just 16 months. 

The company gave no reasoning for the departure but said a search for a replacement will start while interim measures are put in place. It comes as the retailer attempts to drive a turnaround under cofounder Julian Dunkerton, who returned last year. 

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