Sleeper firm Serco seeks new chairman
Troubled outsourcing group Serco, which takes over the Caledonian Sleeper next year, is looking for a new chairman after Alastair Lyons announced he would be stepping down.
Lyons will leave once a successor has been appointed at the company which has a number of government contracts and recently won the franchise for the sleeper service from First Group.
He said he had sought to strengthen the board and improve the firm’s chequered relationship with the UK government.
However, the firm has continued to struggle and last week announced that profits for 2014 were likely to fall again – by a further £20m. It cut its forecast for 2015 and said it had incurred £1.5bn in writedowns connected to losses on contracts. The news led investors to sell shares, wiping a third off the firm’s market value.
This morning Lyons said: “The Contract and Balance Sheet Review, the reassessment of the group’s future prospects, and the creation of the right capital structure are all necessary steps in putting Serco back onto an even keel and giving our new management team the basis for taking the company forward again.
“The initial findings of the Strategy and Balance Sheet Review point to strategic and operational mis-steps at Serco for which, as chairman of the board since 2010, I take ultimate responsibility. It is also the right thing for Serco to select a new Chairman, to take the helm for the future.
“Whilst colleagues have asked me not to resign, it has been my intention to step down once a new strategy and direction for the business were in place. I am, therefore, taking the necessary steps to ensure an orderly process for my own succession during the first half of 2015.”
Soames who joined as chief executive in May, said: “Whilst I respect Alastair’s decision, I want to put on record the fact that he has done an outstanding job stewarding the company through the travails of the last twelve months. Nobody could have worked harder or done more to get us to the point where we can now concentrate on building a solid future for Serco.”
The company takes over the Caledonian Sleeper in April next year and has promised significant changes via a £100m investment in new rolling stock that it says will improve the customer experience. The Sleeper service connects London with Aberdeen, Edinburgh, Fort William, Glasgow, Inverness and many other of Scotland’s main towns and cities.
Total revenue to Serco over the 15-year franchise period is estimated at up to £800m, of which approximately £180m will be in the form of franchise payments.
The new fleet is expected to be introduced by the summer of 2018 and is part-funded by a £60m capital grant from Scottish ministers. The fleet, to be built by CAF, will be leased to Serco by Beacon Rail. Significant improvements include en-suite berths, pod flatbeds, used for the first time in rail, and a brasserie-style Club Car.
Customers will also be able too book through a new website with a broader range of fares, earlier boarding of the trains, the ability to manage their journey virtually and use of many other new service features.