Serco Group plc is a British multinational defence, justice & immigration, transport, health, and citizen services company. It is headquartered in Hook, Hart, England. The company operates in Continental Europe, the Middle East, the Asia Pacific region, including Australia and Hong Kong, and North America. Serco employs approximately 50,000 people worldwide and manages over 500 contracts.
Serco is one of the largest companies in the sector of delivering public services under government contracts. Approximately 55% of the company's revenue is generated from overseas; with revenue in Defence (32%), justice & immigration (25%), citizen services (21%), health and facilities management (13%), and transport (9%).
It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
History
RCA Services
Serco was founded in 1929 as RCA Services Limited, a United Kingdom division of the Radio Corporation of America and initially provided technical services to the cinema industry.
RCA Services Limited began providing services to governments after the Second World War. After the onset of the war, RCA Services was contracted by the British War Office due to the company's engineering and technical background to supply the department with equipment which would simulate the sound of warfare to confuse the enemy. In 1952, RCA Services was contracted to produce submarine-detecting sonar equipment for the US Navy. In 1960, RCA Services was awarded the contract to design, install, and maintain the UK Ministry of Defence (MoD) Ballistic Missile Early Warning System, including ongoing facility management such as cleaning, transport, and logistical stores.
By the 1980s, the European Space Agency contracted RCA Services to support and maintain computer systems and satellites.
Reinvention as a management company
By the 1980s, RCA Services began to interpret their company product as the management, rather than being just an engineering and science company. For their MoD Radar contract at RAF Fylingdales, "the art, it turned out, was in running the people, not the radar." RCA Services won the Ministry of Defence's first outsourcing contract in 1984, managing warehousing using the knowledge of staff who had completed similar work at RAF Flyingdales.
Following the takeover of RCA by General Electric in late 1985, RCA Services Limited was bought out by its local management. It changed its name to Serco ('Services Company') in 1987 and has been a London Stock Exchange listed company since 1988. By 1990s, Serco had expanded from the United Kingdom and Europe globally to Hong Kong, Australia, New Zealand, and North America.
In December 2008, Serco acquired SI International, a provider of IT services to the United States government for $524 million.
Controversies and restructuring
Serco and its competitor G4S were found to have maintained inaccurate records and overcharged the UK Government for electronically monitoring criminals in 2013. Serco's executives at the time were cleared of the fraud charges in 2021 after a 8-year long investigation and trial.
In November 2014, its share price, which stood at 674p before the taxpayer scandal broke in 2013 collapsed to 218.7p, after four profit warnings. In November 2014, it was announced that Alastair Lyons would resign from his position as chairman of Serco. Lyons referred to "operational mis-steps" for which he took "ultimate responsibility", but said he had not been forced out. Serco made a loss of £991million in 2014, reducing to a loss of £69.4million in 2015.
The new chief executive Rupert Soames sold off "scores of divisions". He said the company was suffering from ministers’ improved ability at driving a bargain, and claimed that "the Government has got much more adept at writing contracts and transferring risk to the private sector".
Modern day
John Rishton was appointed as Non-Executive Chairman in Spring 2021, succeeding Sir Roy Gardner who held the position from May 2015. Rishton had been on the Board since September 2016. In September 2017, Serco announced that it would be combining its UK and Europe operations.
In August 2022, Serco announced that it would distribute £9million in one-off payments to about 45,000 non-management staff as the firm lifted its profit guidance and dividend. The sum equated to around £200 for each of its 45,000 workers.