Outsourcing giant Serco’s CEO Rupert Soames will stand down as chief executive at the end of this year.
Soames, 63, whose grandfather was Sir Winston Churchill, told investors on Monday that it was ‘now time for me to outsource myself,’ having overseen a successful transformation of the company since taking charge in 2014.
The businessman will be replaced by Mark Irwin, who currently runs Serco’s UK & Europe arm, having previously led its Asia-Pacific operations between 2014 and 2020. Soames will remain an advisor until September next year.
Leaving: Soames, 63, told investors that it was ‘now time for me to outsource myself,’ having overseen a successful transformation of the company since taking charge in 2014
When Soames joined Serco the group’s reputation had been significantly sullied by a scandal involving overcharging the UK Government tens of millions of pounds for an electronic tagging contract.
In his first year in charge, the firm plunged to a £632million trading loss after issuing numerous profit warnings, and saw the departure of both its chairman and chief financial officer.
As part of a turnaround, Soames slashed costs and sold off divisions, including its troubled Indian-based customer services operation, and reoriented its focus away from private sector work and towards public sector contracts.
In 2019, the Hampshire-based business achieved its first annual revenue growth in six years, helped by expanding into North America and Asia, and paid out its first dividend in five years.
The coronavirus pandemic provided an even greater boost for Serco, which ran around one-fifth of testing sites in England and Northern Ireland and provided call handlers for the much-maligned NHS Test and Trace scheme.
Serco has come under major criticism for making high profits during the pandemic, which climbed by exactly £100million to £232.4million last year.
Revenues have slowed as Covid-related work from the government has been wound down, but the group has still managed to win big contracts, particularly in the defence, immigration and criminal justice sectors.
Chairman John Rishton said Soames had made Serco ‘unrecognisable’ from the business that he joined in 2014.
‘Under his leadership, the business was stabilised, a clear strategy developed and executed, which has resulted in the strong and successful business it is today. Rupert should be really proud of what he has achieved.’
News of Soames’s departure sent Serco Group shares down 5.7 per cent to 169.9p in early trading, making the group the second-worst performer on the FTSE 250 Index behind Aston Martin Lagonda. Their value has still grow by around 57 per cent in the past five years.
Russ Mould, investment director at AJ Bell, remarked: ‘While the share price may still only be a fraction of its pre-tagging scandal days, the business has returned to notably better health.
‘Its reputation has improved, debt is forecast to come down, and profit is expected to go up, which means Soames can exit knowing he has made a difference.’
