Serco is an international services company that operates in markets as diverse as defence, transport, government, science and education. Although it still generates 75 per cent of its sales from the UK market, it won a raft of overseas contracts during 2006 such as a deal valued at Aus$155 million over five years to run Acacia Prison in Western Australia.

While the organisation continues to grow, with total revenues up 12.7 per cent to £2.55 billion during fiscal 2006, it is nonetheless still focusing on cutting operational costs in a bid to improve margins. As a result, despite expectations of double digit growth over the next few years, it will continue to concentrate on boosting efficiency, undertaking selective bidding and managing its contract portfolio tightly. In IT terms, this has seen the company begin implementation of a group-wide SAP financial system, which it says is proceeding to plan. But it is also working on initiatives to centralise and standardise procurement and provide a common shared services centre to undertake various internal administration functions.

The company also intends to streamline its management structure, but expects executive chairman Kevin Beeston to become non-executive chairman from 1 September 2007 as he attempts to diversify his business interests.

Beeston has held the executive chairman role since 2002, after taking on the role of chief executive for three years, but he will continue to chair the board.

Meanwhile, Serco says that it is continuing to invest in the £246m ITNet IT services acquisition it made in February 2005, which was renamed Serco Solutions, in anticipation of the expected rapid expansion of the UK’s local and central government shared services market.

While it implemented a planned restructuring of the organisation during 2006 to refocus its skills base, which resulted in job losses, the capabilities provided by Serco Solutions are considered key to winning certain contracts.

These include business support deals such as the one won from the London Development Agency, which was valued at about £69m over four years.