The share price of Serco is up this morning (March 4th), despite the company announcing a massive drop in its profits in its latest financial results.
It has been announced by the company that pre-tax profit fell to £106.6 million in 2013, from £281.1 million in 2012. Acting chief executive Ed Casey admitted that 2013 had been a "difficult" year for the firm.
Serco paid out more than £90 million to the UK government for charging for tagging people who were either dead or in jail, as well as a further £20 million in other indirect costs.
"The events of 2013 absorbed management's focus and, therefore, interrupted the normal process of improving efficiency and developing our business into new areas," Mr Casey added.
The acting chief executive will step down from the position in the summer, when the role will be taken over by Rupert Soames, who is the current boss of engineering firm Aggreko. Mr Soames will replace Mr Casey as chief executive of Serco from June.
Revenues in the UK rose by three per cent at the firm despite the massive payout to the government, which Serco stated was as a result of the new contracts it has picked up.
Mr Casey added: "There remains much to be done to ensure the agreed programme of corporate renewal is successfully implemented. However, the work we have completed and the undertakings we have made demonstrate our commitment to achieve this."
The acting chief executive revealed that the aim of Serco in the next 12 months is to "ensure that the group has stable operations, appropriate operational controls and differentiated capabilities to make the most of the breadth of our offering across frontline and middle and back office services, and our referenceability from one country to another".
Even though Serco's profits fell by more than 60 per cent in 2013, its stocks have still risen this morning. By 08:37 GMT, the share price of the company was almost one per cent up and at 09:40 GMT stocks were 2.67 per cent higher for the session.
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