Government contracts and growing demand in the Middle East mean that Serco is confident of double-digit growth in 2008. Serco, which provides IT services; traffic and building management; railways and prisoner detention services, released an interim management statement this week for the first quarter of 2008.
“We remain confident of delivering double-digit revenue growth for the foreseeable future,” the company said at its annual general meeting. Contrasting the economic doom being portrayed by many organisations, Serco said 2007 was an “excellent year”.
Serco cited its success in the public sector for its strong position, especially its recent £265 million deal with Glasgow City Council for ICT services. Glasgow City Council, Scotland’s largest local authority, believes the contract will save them £70m over the next decade. The deal involves a joint venture between Serco and Glasgow, with 280 of the council’s staff transferring to the new business. Glasgow has targeted Serco with achieving a 20 per cent efficiency from the deal. “This solution bundles business process outsourcing, IT and property together,” said Kevin Lavery, Serco Solutions CEO.
Serco said its largest market opportunity for 2008 would be in the risky nuclear energy sector. It has placed a bid with partners Bechtel and The Babcock & Willcox Company to decommission Sellafield nuclear power station. Sellafield is one of the oldest nuclear power stations in the UK and was previously known as Windscale, but after a major fire, which resulted in nuclear waste being released into the environment, it was rebranded Sellafield.
The Serco transport division is also performing well having secured a £500m contract with the Dubai government to operate the Dubai Metro.