By Joe Hoppe
Serco Group PLC said Monday that its joint venture with France's Engie S.A. has won defense infrastructure contracts with the U.K. government with a base value of 900 million pounds ($1.27 billion), and raised its 2021 guidance.
The U.K. outsourcing group said that VIVO Defence Services has been awarded contracts to provide asset and facilities management services by the Defence Infrastructure Organisation, or DIO, in two out of four U.K. regions.
The core contract value is expected to be GBP900 million over an initial seven-year period, with three one-year extension options. There will be significant additional project work commissioned as required by the DIO, and while value is uncertain the Ministry of Defence estimates they are likely to be worth a further GBP2.5 billion over the seven-year term.
Serco estimated a total potential value of GBP3.4 billion over the seven years, with core work set to begin in February.
The company also said a strong performance at the beginning of the year has persisted through 2021 to date and all four of its divisions are in-line or ahead of budget. It raised its guidance for underlying trading profit for the year by GBP15 million, to GBP200 million.
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(END) Dow Jones Newswires
June 14, 2021 02:37 ET (06:37 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.