The environmental services arm was identified as ‘non-core’ to the future of Serco Group plc in November 2014 alongside its leisure business and the firm took part in early stage discussions to dispose of these subsidiaries last year (see letsrecycle.com story).
However, the company reported more positive news in its trading update last week (December 7), with group chief executive Rupert Soames stating that it had in 2015 “significantly” reduced net debt, reduced costs, recruited new management and agreed the disposal of its offshore BPO business.
According to the firm, it was the recent agreement to dispose of the BPO business which prompted Serco to “review the previously stated intention to also dispose of our environmental services and leisure businesses”.
Serco said in a statement today: “Our conclusion is that, for both strategic and financial reasons, the interests of the Group will be best served by retaining these businesses within the portfolio. In common with the rest of the Group, they provide frontline services to public sector customers.
“The Environmental Services and Leisure businesses have continued to perform well both financially and operationally, and have a strong pipeline of opportunities.”
Serco Group plc
“In particular, they serve Local Authorities in the UK, to whom we provide a number of other services and we feel that there is real merit in retaining a broad offering to these important customers. Furthermore, the Environmental Services and Leisure businesses have continued to perform well both financially and operationally, and have a strong pipeline of opportunities.”
A spokesman for the Group said its commitment to retain its waste business arm is “part of a broader local government businesses and offer”, adding that the environmental services team “are naturally very pleased about the statement and the demonstration of faith and confidence in the team and in the future of the business”.
Procurement
The spokesman added there are a “strong pipeline of opportunities for 2016 and beyond” with Serco currently engaged in procurement for contracts in St Albans, South London, Surrey districts, Rushmoor and for household waste and recycling centres (HWRCs) in Milton Keynes.
Serco holds a number of household waste and recycling collection and street cleansing contracts in the UK, including a £40 million deal with the London borough of Havering as well as a £48 million extension awarded in July 2014 by Milton Keynes council (see letsrecycle.com story).
Serco also holds multi-million pound waste collection contracts with Chiltern and Wycombe district councils as well as councils in Canterbury, Derbyshire Dales, and the London boroughs of Wandsworth, Bexley, and Hammersmith & Fulham.
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