MARKET REPORT: Outsourcer Serco bulks up asylum arm in Europe

Shares in Serco rose after the outsourcing giant bulked up its immigration division.

The FTSE 250 firm, which manages immigration and prison services in the UK, will snap up European Homecare from a social services group in Germany.

Serco will pay £34million for the German immigration business as it ramps up its presence in Europe.

The latest acquisition employs more than 2,000 staff, manages over 100 facilities and provides accommodation for more than 36,000 people.

Serco is contracted by the Home Office to provide accommodation for asylum seekers, and runs centres such as Gatwick’s Brook House and Tinsley House.

Takeover: Serco will snap up European Homecare from Korte-Stiftung, a social services group based in the Ruhr region of Germany 

Chief executive Mark Irwin said: ‘The acquisition will strengthen our position as a leading partner in immigration services for European governments.’

The shares gained 4.3 per cent, or 6.7p, to 162p as profits are set to hit £245million this year, which is up from the £237million it made in 2022. Revenues should increase by 7 per cent to at least £4.8billion.

But it expects flat revenues next year, partly due to the Government decision to end contracts with 50 of the 400 hotels that it uses to house prospective asylum seekers.

It was a bumper day for investors on the wider market as the FTSE 100 rose 1.3 per cent, or 100.54 points, to 7648.98 and the FTSE 250 was up 3 per cent, or 561.20 points, to 19,256.96.

London’s main indexes soared early on after the US Federal Reserve held interest rates at a 22-year high and signalled they could be cut in 2024.

The gains eased in the afternoon when the Bank of England held interest rates for the third time in a row, striking a much more cautious tone over cutting benchmark borrowing costs next year.

Oil prices were also on the march, rising nearly 4 per cent, to $77 for a barrel of Brent crude.

Stock Watch –  MusicMagpie

MusicMagpie increased its profits following record Black Friday sales.

The electronics reseller’s profit climbed 15.4 per cent to £7.5million in the 12 months to the end of last month.

While full-year revenues were slightly lower than last year, it said a bumper Black Friday offset a softer first half.

And the group’s active subscribers increased by more than a fifth to 37,100.

Shares, which listed at 193p in April 2021, soared 17.4 per cent, or 2p, to 13.5p.

This lifted BP 1.3 per cent, or 6.05p, to 465.9p while Shell added 1 per cent, or 26p, to 2520p.

Back on the stock market, Bunzl rose 0.4 per cent, or 12p, to 3132p after it upgraded its profit forecast for this year. 

The group, which supplies products such as paper napkins and latex gloves, also bought three companies.

Pressure mounted on Entain to turn its business around a day after the gambling giant’s boss quit. 

US fund Corvex, a top-ten shareholder, said further change at the Ladbrokes and Coral owner was needed to improve ‘unacceptable’ performance.

It came after chief executive Jette Nygaard-Andersen stepped down after less than three years in the job. Entain climbed 8.7 per cent, or 73.4p, to 920p.

Investors in Trainline breathed a sigh of relief after the Government decided to pull the plug on creating a state-owned online rail ticket retailer.

The Department for Transport outlined proposals for a website and app in May 2021 but has shelved the idea. Trainline rose 3.4 per cent, or 9.2p, to 284.2p.

Government contractor Capita showed signs of a turnaround after a turbulent year when it said its revenue rose 2.1 per cent in the 11 months to the end of November. Shares rose 1.3 per cent, or 2.6p, to 21p.

There were also gains for SSP – up by 5.4 per cent, or 12.2p, to 238.4p – after the airport caterer expanded its operations in North America and the Middle East.

The Upper Crust owner will take over five new restaurants and bars in two Canadian airports and signed a contract with Jeddah airport in Saudia Arabia.

Aston Martin took a further hit a day after HSBC warned the luxury car maker faces an ‘uphill task’ to earn back trust following issues with the delivery of its new DB12 sports car. 

Shares fell 1.5 per cent, or 3.2p, to 205.4p.

This post first appeared on Dailymail.co.uk