Serco : Clyde and Hebrides Ferries Services

Date: 19 May 2016

Serco Group plc (Serco), the international service company, has been notified by Transport Scotland that it has been unsuccessful in its bid to operate the Clyde and Hebrides Ferries Services (CHFS). Serco's bid sought certain changes to commercial terms aimed at striking a balance between the risks and rewards involved, but in so doing the bid was deemed non-compliant by Transport Scotland. Serco's previously stated pipeline of larger new bid opportunities of approximately £6.5bn included an estimated total contract value of £0.9bn for CHFS. While Serco's pipeline will therefore reduce as a result of losing this opportunity, there is no significant impact to our previously stated guidance given the low probability of success we had ascribed to this bid.

Kevin Craven, Chief Executive of Serco's UK Central Government Division, said: 'We are obviously disappointed by this decision as we believe that we could have made significant improvements to the quality and reliability of these services to the benefit of the communities across the Western Isles. However, the commitments to service and efficiency improvements promised by CalMac Ferries Limited, who have been selected as preferred bidder to continue running CHFS, underline the benefits of testing services provided by the public sector through competitive tender processes.

'Today Serco employs 2,800 people providing public services in Scotland, including the Northlink ferry services and the iconic Caledonian Sleeper, and we look forward to continuing to work with the Scottish Government as they seek to deliver both value for money for taxpayers and high quality public services.'

Ends

For further information please contact Serco:

Stuart Ford, Head of Investor Relations: T +44 (0) 1256 386 227

Marcus De Ville, Head of Media Relations: T +44 (0) 1256 386 226

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