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Outsourcing giant Serco looked set to end the year on a high note as CEO Rupert Soames prepares to leave.
The company, which manages security, transport and immigration contracts, said revenue for the year should be around £4.5bn, up from £4.42bn in 2021.
Serco also raised its profit forecast for the year by £5 million to £235 million, despite inflation expected to affect contract costs.
Turnaround triumph: Serco boss Rupert Soames will leave the company much stronger than he found it when he retires at the end of this year
It was also the last trading update that Soames will oversee as boss of a public company, with Winston Churchill’s 63-year-old grandson retiring at the end of the year. He joined in 2013 and took over a year later.
At the time it was suffering heavy losses, but Soames wasted no time in turning it around.
He was praised for reviewing corporate strategy to focus on government services in areas such as defense, health and transportation.
That paid off during the pandemic, where it helped roll out the NHS Test and Trace program by managing a fifth of the test centers and half of the non-clinical call centres.
Soames leaves Serco with a stronger balance sheet, a restored dividend and large onerous contracts that are definitely in the past.
Mark Irwin, from the UK & Europe division, will succeed him. Shares are up 16 percent this year, but fell 1.2 percent, or 1.9 pence, to 155.9 pence.
The FTSE 100 fell 0.93 percent, or 69.76 points, to 7426.17 and the FTSE 250 fell 0.76 percent, or 144.13 points, to 18,893.79 after the Bank of England hiked rates to 3.5 percent.
“Anyone who wanted a rate hike before Christmas got it, but consumers will wonder if this is a bad thing or a good thing, because as savings rates rise, so do borrowing costs,” said AJ Bell analyst Laith Khalaf.
National Express backed away from fears of being hit by inflation, interest rates and wage pressures across the Atlantic.
Shares of the bus company, which have languished around 44 percent this year, fell 6.5 percent or 10 pence to 143.8 pence after City analysts painted a gloomy picture.
Peel Hunt downgraded its rating for the stock from “buy” to “hold” and lowered its price target from 270 pence to 175 pence, saying it could come under pressure from costly wages in the UK and Northern America.
North America’s school bus division is hampered by a driver shortage, leading to unprecedented wage inflation.
Mining giant Rio Tinto revealed it is open to buying critical mineral assets such as lithium and nickel less than a week after it sealed its £2.7 billion acquisition of Turquoise Hill in Canada.
Traders were excited about potential mergers and acquisitions and shares were up 0.6 percent, or 35p, to 5657p. In a bid to shake off Vladimir Putin’s regime, packaging company Mondi agreed to sell three Russian factories to Moscow producer Gotek for around £21 million.
But such divestments will be far from smooth sailing, with Mondi expecting a loss of around £61m to £70m. It dropped 2.2 percent, or 31.5p, to 1437p.
Gambling giant Flutter, owner of Paddy Power and Betfair, said Paul Edgecliffe-Johnson, the chief financial officer of the Holiday Inn and Crowne Plaza owner IHG, will start as chief financial officer on March 20.
Finance chief Jonathan Hill is stepping down as chief operating officer of the group. Shares fell 2.9 percent, or 345p, to 11,595p.
There was also good news for RWS, which employs language specialists worldwide to translate niche documents such as patient reports for pharmaceutical companies.
It reported an 8 percent increase in revenue to £749.2 million for the year to September, while profits jumped 51 percent to £83.2 million. The stock rose 1.8 percent, or 6.2p, to 347.6p.
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