Company has signed £2.3bn of deals since June and says public sector cuts will drive outsourcing

Serco said it expects to increase revenue to £5bn a year by 2012 as public sector cutbacks drive outsourcing opportunities.

The support services giant - which was forced to issue an apology to suppliers earlier this month after demanding rebates on existing contracts – made the prediction as it revealed it has been awarded new contracts worth £2.3bn since the end of June, bringing the total value of the year to date to £4.5bn.

In an interim management statement, Serco said: “In the current economic environment, there remains strong global demand for the efficient delivery of essential services which drives significant opportunities for Serco in both existing and new markets.

“This and our operational and financial performance during the year supports our expectation of achieving strong organic revenue growth in 2010 and making further progress towards our 2012 margin guidance. We continue to expect an increase in revenue to approximately £5bn and in adjusted operating profit margin to approximately 6.3% by the end of 2012.”

On Friday (12 November), Serco became the latest government supplier to sign Memorandum of Understanding to deliver savings on a number of its contracts.

These savings, which are not material to the group’s financial expectations, will be made through scope changes and cost efficiencies, the company said.