HOOK (dpa-AFX) - Outsourcing services company Serco Group Plc (SRP.L) announced Tuesday that it has been awarded two contracts by the UK Department for Work and Pensions or DWP to help people find jobs in the West Central region and Wales as part of the Restart programme.
The combined value over the initial four and a half-year contract period is estimated to be around 350 million pounds. The amount is dependent on the number of people who find employment. The contracts have options to extend for a further two years.
The Restart programme will help people who have been unemployed for between 12 and 18 months get back into work, including those impacted by the Covid-19 pandemic.
Under the contracts, Serco will lead a team of employability providers including 13 Small and Medium sized Enterprises or SME's, 6 Local Authorities and 4 charities.
The company expects delivery to start in June this year. The majority of the revenue from the contract will be outcome-related, i.e. only earned when jobseekers have been employed for six months working an average of 16 hours a week and earning at least the National Living Wage.
Consequently, the contract will be loss-making in 2021 as it mobilises and helps the initial cohorts find work. The company expects losses in 2021 to be in the range of 5 million pounds to 10 million pounds. The contract will be profitable thereafter.
Serco further said it has completed the acquisition of Whitney, Bradley & Brown Inc. from an affiliate of H.I.G. Capital for $295 million.
As stated earlier, in calendar year 2021 WBB is expected to generate revenue of around $230 million or 165 million pounds, and EBITDA of $29 million.
Serco will benefit from eight months of WBB's financial performance in 2021.
Further, the company updated guidance for 2021 to take account of eight months of financial contribution anticipated from WBB, the initial losses expected in 2021 on the Restart contract as well as recent exchange rates.
The company now expects revenues of around 4.3 billion pounds, higher than previous outlook of 4.2 billion pounds, and last year's revenues of 3.9 billion pounds.
Underlying Trading Profit is now expected to be around 185 million pounds, higher than previous outlook of 175 million pounds, and last year's profit of 163 million pounds.
In London, Serco shares were trading at 145.52, up 2.91 percent.
Copyright RTT News/dpa-AFX
© 2021 AFX News
