CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Serco stocks rise despite plunging profits

Article By: ,  Financial Analyst
March 4, 2014 10:15 AM

The share price of Serco is up this morning (March 4th), despite the company announcing a massive drop in its profits in its latest financial results.

It has been announced by the company that pre-tax profit fell to £106.6 million in 2013, from £281.1 million in 2012. Acting chief executive Ed Casey admitted that 2013 had been a "difficult" year for the firm.

Serco paid out more than £90 million to the UK government for charging for tagging people who were either dead or in jail, as well as a further £20 million in other indirect costs.

"The events of 2013 absorbed management's focus and, therefore, interrupted the normal process of improving efficiency and developing our business into new areas," Mr Casey added.

The acting chief executive will step down from the position in the summer, when the role will be taken over by Rupert Soames, who is the current boss of engineering firm Aggreko. Mr Soames will replace Mr Casey as chief executive of Serco from June.

New contracts

Revenues in the UK rose by three per cent at the firm despite the massive payout to the government, which Serco stated was as a result of the new contracts it has picked up.

Mr Casey added: "There remains much to be done to ensure the agreed programme of corporate renewal is successfully implemented.  However, the work we have completed and the undertakings we have made demonstrate our commitment to achieve this."

The acting chief executive revealed that the aim of Serco in the next 12 months is to "ensure that the group has stable operations, appropriate operational controls and differentiated capabilities to make the most of the breadth of our offering across frontline and middle and back office services, and our referenceability from one country to another".

Even though Serco's profits fell by more than 60 per cent in 2013, its stocks have still risen this morning. By 08:37 GMT, the share price of the company was almost one per cent up and at 09:40 GMT stocks were 2.67 per cent higher for the session.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024