Corporate outsourcing companies continue to buck the plunge in the stockmarket, which has fallen to its lowest level since 1998 as a result of the terrorist attack on the USA and its potential consequences. Outsourcing companies are winning lucrative long-term UK deals while foreign governments want to replicate the UK public sector financing model.
Serco inspires contract loyalty
Serco, the public sector support services company, boasts a bid win rate of over 70 per cent and a contract renewal rate of over 90 per cent. The company continues firmly on the growth path with pre-tax profit up 33 per cent to £22.4m and turnover up 15 per cent to £434m in the half-year to 30 June 2001.
Major new contracts include the building and running of England's Traffic Control Centre — a 10-year deal worth £160m. Serco has also won the management contract for a new immigration centre. A new education business has been established. The unit has secured two contracts to manage local education authorities. Serco has extended its reach with a move into scientific outsourcing via its recent £70m acquisition of AEA Technology's nuclear consulting business. The company also has contracts with the National Physical Laboratory and the Docklands Light Railway under its belt. In the last six months Serco won orders worth £650m, taking its total order book to £6.2bn.
WSP breaks for the borders
WSP, the engineering and development consultant, made a pre-tax profit of £5.43m, in the half-year to end June 2001, up 37 per cent on the same period in the previous half on turnover up a massive 68 per cent at £96.2m. Major new contract wins have been BAA, Canary Wharf and the Highways Agency. WSP has expanded geographically. Acquisitions made by the company last year in the US have generated work at Canary Wharf. The company also acquired Sweden's Jacobson & Widmark in June, along with FMG, which provides property and facilities management services in South Africa. More than half the company's revenue now comes from overseas.
Source
The Facilities Business
Postscript
Malcolm Craig is editor of Stockmarket Confidential.