Serco PLC is to pay a bonus to staff for a second year running as ongoing work for the UK government’s Covid test & trace scheme prompted it to raise its 2021 revenue and profit estimates.
The ex-gratia payment will be made to around 52,000 employees and including a donation to the established Serco People Fund will cost the company around £10mln. In 2020, the group paid a bonus of £5mln or £100 each to staff.
In today’s update, Serco said trading has been stronger than expected in recent months and as a result revenue for the year will be around £4.4bn against a previous forecast of £4.3bn and underlying trading profit not less than £225mln (£200mln forecast previously).
Several factors had combined to improve the performance, said the FTSE 250 group, including the work on Covid support schemes in the UK and also Australia running for longer and with higher volumes than expected.
The UK, in particular, has seen cases spike higher in recent months due to the spread of the Delta variant of the virus.
In September, the government confirmed the company had received £387mln in 2021 for test & trace work up until July and £316mln in 2020.
Serco added that immigration work in the UK and Australia, and healthcare insurance eligibility in the US had also seen higher volumes than expected while several contracts anticipated for 2022 are now likely to be signed this year.
Due to the better revenues, the group increased its cash flow forecast to £150mln and reduced its net debt estimate to £220mln.