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August 28, 2009 · Leave 
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It inspects schools, trains our armed forces, helps protect our borders, 
maintains our nuclear weapons, runs our trains and operates our prisons.

Telegraph | Aug 26, 2009 
<http://www.telegraph.co.uk/finance/financetopics/recession/6092941/Have-you-heard-about-the-company-that-runs-Britain.html>
 

By Graham Ruddick

Most of the public will never have heard of Serco, a FTSE 100 company that does 
all of the above and more.

Led by South African Chris Hyman, Serco is also making money doing it and today 
underlined it is proving one of the recession winners. Profits in the first six 
months of the year – one of the toughest the UK economy has faced for decades – 
jumped 33pc to £83.4m.

However, Serco’s journey into the DNA of Britain’s public infrastructure, like 
those of rival support services companies Capita and Interserve, began before 
the recession arrived.

All have benefited from the growing culture of outsourcing services under 
Labour, and Serco expects this trend to continue as the gaping hole in the 
public finances forces the Government to cut back.

Serco has secured a record number of contracts in 2009 so far, worth £4bn, as 
its revenues climbed 30pc to £1.95bn.

The deals includes a contract to design, build and operate Boris Johnson’s 
cycle hire scheme for London and to operate two new prisons at Belmarsh in 
London and Maghull in Liverpool.

These come on top of Serco’s existing services, which include operating 
London’s Docklands Light Railway, running the Northern Rail and Merseyrail 
train networks, providing the Ministry of Defence with air surveillance and 
control systems, and delivering infrastructure and intelligence to the UK 
Border Agency.

To complete the list, Serco also has a six-year contract with Ofsted to run 
inspections in the Midlands at schools and further education colleges. In 
defence, the company is battling to win the rights to run the Army’s 
recruitment programme and already helps to train armed forces about using 
Britain’s fleet of aircraft, such as the Chinook and Apache helicopters.

In partnership with Lockheed Martin and Jacobs Engineering, Serco also manages 
the Atomic Weapons Establishment, which provides and maintains Britain’s atomic 
warheads.

Revenues from civil government work increased 49pc in the period and a bullish 
Serco expects this trend to continue, giving it even more control of Britain’s 
infrastructure. The company estimates that local authorities have endured a 
£4bn deficit in income for over the last two years as a result of the recession 
and that, by 2012 it will have revenues of £5bn.

In the results, Mr Hyman says: “The financial crisis and subsequent economic 
slowdown means that governments around the world are contending with increasing 
demand for high quality services whilst also facing a sharp deterioration in 
public finances. They continue to experience growing demand for quality 
services from their citizens.

“We believe this is also leading to a greater acceptance of innovative ways of 
achieving these changes, a broader range of markets to be addressed, and an 
increase in the size and term of change programmes in order to achieve the 
scale of efficiencies required.

Not surprisingly, the shares rose 4pc following the results.

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