Test and Trace fiasco hands Serco a £225m profit as heavily criticised firm hikes forecasts for a THIRD time
Serco will smash profit forecasts after raking in millions from the much-criticised Test and Trace scheme and other Covid contracts.
The outsourcer said the gruelling second wave and other spikes in infections this year meant its pandemic-related work in the UK and Australia went on for much longer than expected.
Serco runs 25 per cent of Covid testing centres and around half of contract tracing operations in the UK – but has been falsely described as one of the groups that designed the overall scheme and its app.
Profits: Serco said the gruelling second wave and other spikes in infections this year meant its pandemic-related work in the UK and Australia went on for much longer than expected
The FTSE 250 group said in a surprise trading update that it will make profits of at least £225million in 2021.
This is the third time it has raised its profit estimates – rising from previous forecasts of £200million and far ahead of the £163million the company made in 2020.
Turnover is expected to rise to £4.4billion, from guidance of £4.3billion.
It will be the second year that Serco has seen turbocharged growth because of the pandemic.
Last year boss Rupert Soames came under attack for paying the first dividend since 2014 after receiving hundreds of millions of pounds from the botched Test and Trace scheme.
The programme launched in May 2020 but took months to work effectively – with many saying it hindered attempts to control the pandemic.
Critics said taxpayers’ money should not be spent on payouts to Serco’s shareholders, with Labour’s deputy leader Angela Rayner previously saying Serco and other outsourcing groups were being ‘rewarded for their failure’.
Serco received around £350million for its Test and Trace contracts in 2020 – a fraction of the £22billion the scheme was thought to cost during that financial year.
The company admitted that the bumper profits from Covid are likely to be one-offs. It still expects revenues to reach £4.2billion and profits of £196million.