Serco shares have fallen more than 20%

Shares in the outsourcer dropped more than 20% as the markets opened after it issued a shock profit warning last night.

by Emma Haslett
Last Updated: 04 Jul 2014

- From MT's April issue: 'Murdering scumbags: How did outsourcing get into this mess?'

Is Rupert Soames having second thoughts? The former Aggrekko boss hasn't even set foot in his new office yet - and after shares in Serco crashed more than 20% this morning, he'd be forgiven for deciding against it altogether.

Last night (after the stock market closed), the outsourcer issued a surprise statement saying performance so far this year has been 'more challenging than expected', and that it is considering 'strengthening the balance sheet through an equity placing' - ie. an emergency rights issue, which analysts reckon will be about £500m. Soames, it added, will start his job on Thursday, a month earlier than originally planned.

It's been a tough few months for the company: last year, it was the centre of claims it had over-charged the government for tagging criminals, which it settled in December with a £68.5m payout - although the Serious Fraud Office is still investigating it. Shares have already fallen 19% this year, after it warned on profits in January (which makes this one its third profits warning in less than a year).

The company said it would make a further announcement 'as soon as possible this week', but its AGM is due to be held on May 8. Soames will only have been in the job for a week - but don't expect shareholders to hold back on that account. If you thought Barclays was good, this is going to be positively spicy.

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