Serco to resume dividend after NHS Test and Trace contract supports 36% profit growth

Serco Group has announced plans to resume its dividend following 36 per cent increase in its underlying trade profit.

The firm is set to restart the payment of dividends for the first time since 2014 after an “impressive” performance in 2020.

Serco, which last year secured a government contract to manage facilities at regional COVID-19 test sites as well handling aspects of contact tracing for NHS Test and Trace via call centres for home tests, has reported a 20 per cent growth in revenue.

The firm, which has come under fire for its involvement in the Test and Trace programme, stressed that its work with the Test and Trace app accounts for just 1 per cent of its profit increase.

Rupert Soames, Serco Group chief executive, commented: “In the coming months, every company’s trading statement will pay glowing tributes to employees, and thank them for their resilience and courage. I have struggled to think of words that are not trite or clichés and will not be repeated by a thousand other CEOs.

“Turning to our financial performance in 2020, growing revenues by 20 per cent and underlying trading profit by 36 per cent, is all the more impressive as it follows strong growth in 2019 and underlines the momentum behind Serco’s return to robust financial health.

“This performance is particularly gratifying given the disruption caused to some parts of our business by Covid-19; despite approaching £400m of Covid-19 related revenues, the net impact of Covid-19 was around 1 per cent of underlying trading profit, and the balance of the 35 per cent increase in profits came from the normal operations of the business.”