London, June 17, 2026, 14:14 BST
- Serco shares slipped 1.4% to 241 pence after ministers in the UK announced new rules to curb the practice of always outsourcing.
- Departments are being told to prepare five-year in-house capacity plans and run a public-interest test before renewing contracts worth more than 1 million pounds.
- Serco’s next update comes on June 25, when the pre-close trading statement will test if the group’s defence-heavy order book is enough to balance UK policy risk.
Serco Group shares slipped on Wednesday as the UK government pushed forward with efforts to take more public services in-house, moves that weighed on the prominent outsourcing company.
The stock fell 1.4% to 241 pence in early London trading. The FTSE 250, which tracks mid-cap UK stocks, also moved lower, off 0.4% by 0936 GMT as the broader UK market eased.
Timing is the main problem. Cabinet Office guidance will need central government departments to make five-year plans for building in-house capacity and to run a public-interest test—judging if the state could do the service better—before any outsourced contract above 1 million pounds is renewed.
Ministers are moving to stop “outsourcing by default,” chief secretary to the prime minister Darren Jones said. Cabinet Office minister Chris Ward went even further: “the age of outsourcing is over.” They singled out cleaning and security for change, not Serco’s wider business. But the comments were strong enough to get investors’ attention. London South East
The report also flagged G4S, Serco, OCS and ISS as companies linked to the old outsourcing model. That gave a sense of broad sector relevance, but Serco showed the clearest response among London-listed stocks after the news on the new policy.
The move came two days after a separate political spat involving Serco’s immigration contracts. Reform UK’s Zia Yusuf said government deals might get a review if reports about deportation plans were true. Serco said it “does not take political positions” and carries out services “as specified” by the authorities. The Guardian
Serco’s latest results handed bulls some relief. In March, the group posted 2025 revenue of 4.9 billion pounds and underlying operating profit of 272 million pounds. Order intake was 5.5 billion pounds, with about two-thirds from defence contracts. The order book climbed to 14.5 billion pounds, covering work still to be delivered.
Chief Executive Anthony Kirby said in the results that the group is “well placed to deliver increased organic revenue growth and underlying operating profit”. Underlying operating profit is Serco’s preferred measure before items marked as non-underlying. The company has guided for revenue of about 5 billion pounds in 2026 and underlying operating profit around 300 million pounds. Serco
June 25 is now more important, with Serco set to release its pre-close trading update, a brief statement ahead of its main half-year results. Those are due Aug. 6.
But there’s a risk here. If the public-interest test starts slowing contract renewals, or sends basic facilities work back to Whitehall, or extends into more advanced services, Serco’s UK revenue visibility could take a hit. But if the policy stays with simple support work and defence plus justice contracts keep going, the impact might be more on sentiment than actual earnings.
