Serco Group (GB:SRP) yesterday announced that Rupert Soames will retire from the position of chief executive and also from the board – which he described as ‘outsourcing himself’.
Soames – described as the ‘saviour’ of the outsourcing giant – will serve the company till the end of this year and step down on January 1, 2023.
Soames will remain an adviser in the company for another year.
During his tenure of eight years, Soames has successfully led the company through controversies including over services to the UK Government during the COVID-19 pandemic.
Soames has been known for his stable approach.
Soames said, “It has been the privilege of my working life to lead Serco for the last eight years, but it is now time for me to outsource myself.”
He will be succeeded by Mark Irwin, who is promoted from chief executive of the UK and Europe region.
Following the news, shares went down by 6.6%, placing it among the top fallers on the FTSE 250. The stock has seen several ups and downs since Soames joined the company in 2013. In the past year, the stock had been trading up by 26%.
Analysts at Liberum, an investment bank said some investors would be ‘inevitably disappointed’ by the departure but that Irwin, 57, was a ‘safe pair of hands’.
What does Serco do in the UK?
Serco Group is an outsourcing company mainly serving the public sector.
In the UK, the company operates in six sectors, citizen services, defence, justice, immigration, healthcare, and transport services.
Serco share price forecast
According to TipRanks’ analyst rating consensus, Serco Group stock has a Strong Buy rating, based on six Buy recommendations.
The SRP price forecast is 215.6p, with an upside potential of 28.2%. The analyst price targets range from a low of 195p to a high of 258p.
Ending Notes
Even though shareholders are a bit disappointed by Soames’s retirement, the company is looking forward to Irwin’s tenure.
Mark Irwin said, “With its unique Business-to-Government platform, international footprint, strong balance sheet, and large and growing order book, Serco is well positioned to deliver superb public services, rewarding careers for colleagues, and growing returns to shareholders.”
