Outsourcing giant Serco today boasted a mammoth £28bn bid pipeline as cash-strapped governments turn to the private sector to make savings.
The company, which posted a 30% rise in pre-tax profits to £177.1m in 2009, is eyeing expansion at home and abroad as the demand for outsourcing increases.
Shares rose 6% as chief executive Christopher Hyman said: “Fiscal pressures are increasing in all of our global markets, presenting ever greater opportunities for the efficient delivery of essential services.”
Serco – whose markets stretch across services including defence, education, health and transport – saw revenues jump 27% to £3.97bn last year.
The firm wins one in every two new contracts it bids for and retains its deals 90% of the time.
It added: “Governments around the world are increasingly recognising the benefits of competition and the use of the private sector to improve the quality and efficiency of services and assist recovery from recession and deficits.”
In the UK, the company said there were “substantial opportunities” in offender management, with outsourcing deals at underperforming prisons due to be tendered over the next year.
The firm was chosen as preferred bidder to manage and operate two new prisons at Belmarsh West, London, and Maghull in Liverpool last year.
Serco is also looking to expand in the UK health market and win more contracts to deliver the Government’s Flexible New Deal programme to help those unemployed for more than 12 months back into work.
The company won three five-year deals worth a combined £500m last year and expects another 23 contracts to come up for grabs in 2010 at an average value of £75m each.
Meanwhile Serco is also targeting councils for work as budgets come under pressure. The firm currently provides environment services such as rubbish collection and street cleaning to 14 UK local authorities in the UK.
Seymour Pierce analyst Caroline de La Soujeole said: “The company has a good geographical and services mix with strong revenue visibility in the medium term.”
