Outsourcer Serco Group PLC (LON:SRP) has been named Preferred Bidder for a contract to run what will be the biggest prison in Australia, with an estimated total value to the firm over a 20-year term of approximately A$2.6bn, or around £1.6bn, based on the current exchange rate.
The contract to operate the New Grafton Correctional Centre (NGCC) in New South Wales is expected to commence in 2020.
The FTSE 250-listed firm is part of the NorthernPathways consortium which will design, build and operate NGCC in a Public Private Partnership for the NSW Government.
When completed, NGCC will be the largest correctional facility in Australia.
The under-pressure group said the consortium will now enter into final contract negotiations and a further announcement will be made at the appropriate time.
The contract news comes less than a month after Serco’s full-year results saw it slip back to its old ways of disappointing the market by reporting an 11% organic decline in 2016 revenue
Revenue from continuing operations in 2016 slipped to £3.01bn, down from £3.18bn in 2015.
Although including discontinued operations, revenue fell to £3.05bn from £3.51bn, marginally ahead of the company's guidance of £3bn.
The group returned to the black with a pre-tax profit of £29.6mln, compared to a loss the year before of £69.4mln, but an £18mln loss from discontinued operations meant the bottom line stayed red, with a loss of £1.1mln, versus a £153.1mln loss in 2015.
In early trading, Serco shares were 1.7%, or 1.9p higher at 117.4p.
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