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Serco wins Aussie prison contract
Serco (SRP) 114p
Loss to date: 19.1%
Original entry point: Buy at 141p, 22 December 2016
Outsourcing firm Serco (SRP) hasn’t made the best of starts as one of our Top 10 for 2017.
Boss Rupert Soames admitted alongside a pretty desperate set of 2016 figures (22 Feb) that the company’s recovery would be a ‘long and winding’ road.
However, he also pointed to six big contracts that could be secured in the coming months and there has been some positive news of late which suggests the company has a brighter future.
The company has just won a £1.6bn contract to run Australia’s largest prison when it opens in 2020. The 1,700-capacity New Grafton Correctional Centre in New South Wales, Australia will hold 1,000 men and 300 women in maximum security and house 400 minimum security inmates.
Serco was the top performer in our portfolio of picks for 2016 and we remain positive on the investment case, despite the recent share price weakness.
We’re sticking with our positive stance. (TS)