Serco PLC (LON:SRP) was awarded a four-and-a-half-year contract by the Department for Work and Pensions (DWP) to help job seekers in the Midlands and Wales as part of the UK government’s Restart programme.
The FTSE250 group, which has been playing a leading role in the government’s controversial test and trace programme, said the contract will be worth £350mln over its duration with a two-year extension option.
Restart is designed for people who have been out of work for 12 to 18 months including those made unemployed due to the Covid-19 pandemic.
Serco said the contract was awarded after a competitive process, with most income to be generated when people find a job so the contract will be loss-making initially.
The group estimated losses in 2021 to be in the range of £5m-10m with the contract to be profitable thereafter.
Rupert Soames, Serco’s chief executive, said: "We are delighted to have been selected after a rigorous procurement process by the DWP to deliver a significant part of the Restart programme, which is an important component of the Government's strategy to "Build Back Better".
“Serco has extensive experience and a proven track record in employment services, and in managing teams of expert partners, including small companies and charities, who will work with us to achieve positive outcomes both for individual job-seekers and the UK economy more generally."
Elsewhere, the outsourcer added it has now completed the acquisition of WBB for US$295mln and has published new forecasts for 2021 to reflect an eight-month contribution from the US firm and also the Restart contract.
Revenue for the year is now estimated at £4.3bn, underlying trading profits £185mln and free cash flow of £85mln.