Serco Group Plc climbed the most in more than a decade after the U.K. outsourcing company appointed Rupert Soames as chief executive officer after a series of problems with government contracts.
Soames, currently chief of Aggreko Plc, the world’s largest supplier of mobile power generators, will take over from Serco’s interim CEO Ed Casey on June 1, the Hook, England-based company said in a statement today. Casey has steered the company since Christopher Hyman resigned last year amid an inquiry into overcharging. The stock rose as much as 13 percent.
“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,” Serco Chairman Alastair Lyons said in the statement. “He and his team have driven growth in Aggreko.”
Serco said in December that it would repay the British government 68.5 million pounds ($115 million) after an audit found it overcharged for the electronic tagging of criminals. In Australia, where Serco manages immigration centers, its business is under pressure as the company may lose as much as 8 percent of its revenue if Prime Minister Tony Abbott fulfills his pledge to stop the flow of asylum seekers arriving by boat.
Serco shares climbed as much as 52.70 pence to 463.50 pence, the biggest intraday advance since October 2001. The stock was up 8.6 percent at 446 pence as of 10:09 a.m. in London, paring the decline to 11 percent this year and giving the company a market value of 2.23 billion pounds. Aggreko fell 3.4 percent to 1,574 pence.
“Serco’s reputation with clients and decision makers has just gone up two notches on the dial from zero,” Shore Capital said in a note. “Mr Soames will be a very busy man for the next few years.”
Serco will publish full-year earnings on March 4.