March 12, 2015 / 7:26 AM / in 4 years

Serco profits collapse, kicks off rights issue

LONDON, March 12 (Reuters) - Serco kicked off a 555 million pound ($831 million) rights issue on Thursday and said it had the right plan in place to turn the embattled British outsourcing firm around after a spectacular collapse in profits and reputation.

The group, undergoing a mass overhaul after a disastrous period of contract scandals and problems, posted a 2014 operating loss before execptional items of 656 million pounds, compared to a profit of 236 million pounds a year ago.

Guidance for 2015 profit was maintained, although Serco scrapped the dividend and added it would not now comment on prospects for 2016 and beyond due to the impact of lost work, loss-making contracts and falling margins.

Serco said it was making progress on a number of asset disposals to help reduce debt.

$1 = 0.6676 pounds Reporting by Neil Maidment; editing by Kate Holton

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