‘Time for me to outsource myself’: Serco boss Rupert Soames to retire after eight years leading government contractor firm
- Serco’s UK & Europe boss Mark Irwin will become its new chief executive
- Soames joined Serco when the firm was mired in an electronic tagging scandal
- The company has come under fire for making high profits during the pandemic
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.
These measures paid off, with the Hampshire-based business achieving 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.
It has come under major criticism for making high profits and paying dividends to shareholders during the pandemic, while Soames received backlash for earning a compensation package of £4.9million in 2020.
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.
Deals recently won by the company include one worth $334million from the US Navy for work on submarines and a £300million contract to run the new HMP Fosse Way prison in Leicestershire.
Alongside these deals, it manages the Caledonian Sleeper train, London’s Santander cycle hire scheme and the Yarl’s Wood immigration removal centre.
Chairman John Rishton said Soames had made Serco’ unrecognisable’ from the business that he joined eight years ago.
‘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 6.8 per cent to £1.68 On Monday, making the firm the second-worst performer on the FTSE 250 Index behind Aston Martin Lagonda. Their value has still grown 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.’
Share or comment on this article: