Serco share price slumps as new shares enter fray

Serco Group Plc (LON:SRP) today announced that the company had closed acceptances for its new ordinary shares, with a final rate of valid acceptances at 94.7 percent, or about 520 million shares priced at 101p each, well below the current price of Serco stock. Soon after the announcement, the company updated investors, saying that the remaining 5.3 percent of the new issue had also been placed.

Serco’s shares had lost 3.16 percent to 142.06p by 12:19 BST today, lagging well behind the midcap benchmark FTSE 250 index, which had dipped about 0.8 percent. The company’s stock has lost more than 10 percent this year and over 60 percent year-on-year.
Serco, based in Hook in Northern Hampshire, launched the 1 for 1 Rights Issue in March, alongside the company’s annual report for the 2014 financial year. The report noted that sales had dropped 7.7 percent on an annual basis to £3.955 billion, while the operating results slumped to a £656 million loss from a £236 million profit for the previous year.
“Asking shareholders for financial support, and lenders to adjust terms on their facilities, is not a position any management would want to be in,” Serco chief executive Rupert Soames commented with the March 12 report. “But we are determined to repay the confidence and support shown to us, to the benefit of all.”
Serco was ‘pleased’ to announce the successful placement of nearly 94.7 percent of the issue today, and later in the day the company also announced that Merrill Lynch and J.P. Morgan had procured subscribers for the remaining 5.3 percent at 142p per share.
The company’s next earnings report is due on August 10.
As of 13:30 BST, Friday, 17 April, Serco Group plc share price is 140.10p.