Serco sells Great Southern Rail for £2.5m

LONDON (ShareCast) - Outsorcing group Serco has announced it will sell "luxury" long-distance rail service Great Southern Rail for £2.5m to Australian private equity firm Allegro. The group, which issued two profit warnings in 2014, said it had agreed to a sale as it aimed to narrow its focus.

Rupert Soames, the group chief executive, said that Serco "needs to concentrate on its core as a leading supplier of public services and we cannot provide the focus and investment [Great Southern Rail] needs to survive".

"We will continue to build a strong transport business where Serco's capabilities can be deployed and transferred internationally, and our recent contract award to support the new North South Railway in Saudi Arabia is testament to the progress we are making," he added in a statement on Monday.

Earlier in March, shares in the company fell as much as 16% after its annual results showed it had swung to a £1.35bn loss compared with a £146m profit in the previous 12 months, while revenue fell 7.7% to £3.95bn.

Serco shares were down 0.30% to 167.60p at 10:27 on Monday.