London bike scheme firm profit up

London's proposed bike hire scheme begins in the summer of 2010

Serco, which has been awarded the contract to operate London's new bike hire scheme, said profits have surged as it won a record number of contracts.

Pre-tax profit rose 33% to £83.4m in the first six months from the same period last year.

The company signed contracts valued at £2.1bn and was named the preferred bidder for £1.4bn worth of contracts.

Serco is benefiting as cash-strapped governments increase outsourcing of key services to private companies.

Increased demand

"The financial crisis and subsequent economic slowdown means that governments around the world are contending with increasing demand for high quality services whilst also facing a sharp deterioration in public finances," Serco said.

The company recently won a Transport for London contract to design and operate the new network of 6,000 bicycles for hire and 400 docking stations in central London.

The London Cycle Hire Scheme will be similar to Paris's popular Velib bike hire scheme.

The six-year contract is valued at about £140m, Serco said.

The company also operates the Docklands Light Railway in London's Canary Wharf and prisons in the UK and Australia, as well as support services for the NHS and the US government.

"In home affairs, both in the UK and Australia, we continue to see strong opportunities driven by rising prison populations and border security issues," Serco said.

"Given the economic climate our customers face, they are increasingly asking for our support in existing markets, and we also see significant opportunities to extend our capabilities to new markets," it added.

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