More woes in the UK’s outsourcing sector.

Shares in Serco have fallen as much as 19 per cent this morning as the company reported a 13 per cent drop in revenues in 2016.

The public sector outsourcer reported revenues in line with estimates but investors are shunning shares this morning as its restructuring plans “continue to dominate the financial and operating performance”, said analysts at Shore Capital.

Serco shares are now on course to suffer their worst daily fall since a 32 per cent collapse in November 2014. The company kept its guidance for 2017 unchanged “so we continue to anticipate another reduction in revenues, profitability and earnings, with another step up in net debt”, said Shore Capital.

“However, we believe that this year is set to see the nadir of financial performance – underpinned by successful cost reduction.”

Analysts at Liberum issued a “sell” on the company from its previous recommendation of “hold”, slashing its target share price from 135p to 12op. Shares are currently trading at 125.9p at publication time.

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