Churchill's grandson to lead Serco

Monday 03 March 2014

Shares in troubled private security firm Serco rose sharply today after the company hired a respected FTSE 100 boss to lead its turnaround.

Rupert Soames has been at the helm of Aggreko, the world's largest temporary power generation and temperature control services business, since 2003. Mr Soames, who is a grandson of Winston Churchill, will take over as Serco's chief executive in June. Its shares surged by more than 10%, while Aggreko's fell 4% following the news.

Serco has been without a permanent boss since October after Christopher Hyman left in the wake of a scandal over Serco's criminal tagging contract. It recently agreed to repay the Government £68.5 million for over-charging on the tagging contract, as well as to repay £2 million of past profits from a prisoner escorting contract.

Mr Soames, who has been appointed on a salary of £850,000, said: "I am aware that the company has experienced significant recent difficulties but the work that Serco does is important to the lives of millions of people and I believe that we can find a way through to a bright future."

The group, which runs a vast range of services from prisons to rail services, warned last month that profits for 2013 will be up to 20% below City hopes. Aggreko joined the FTSE 100 Index in 2009 and has provided power at some of the world's biggest events, including the London 2012 Olympics.

Serco chairman Alastair Lyons said: "Rupert Soames is a highly experienced FTSE 100 chief executive with a significant track record of success, leading a substantial and complex international support services business."

The company is co-operating with investigations by the Serious Fraud Office on the allegations that it and rival G4S overcharged for tagging offenders, some of whom were found to be dead, back in prison or overseas. The revelations led to a freeze on bidding for lucrative Government contracts, although Serco said recently that it had now received a ''positive assessment'' of its corporate renewal plan from the Cabinet Office.