Troubled outsourcing group Serco face further turmoil after chairman Alastair Lyons announced he was stepping down.
The move comes after the firm which was recently awarded a 15-year franchise to operate the iconic Caledonian Sleeper service saw its share price plummet after new CEO Rupert Soames warned on profits for the next two years and wrote down £1.5 billion from the value of the business.
Mr Lyons took over as chairman in 2010 and his time at the helm has been one of the most tumultuous in the group’s history.
It included a scandal hit 2013 when the firm was forced to repay £68.5 million to the UK Government after it was found to have overcharged for criminal tagging services and had to make a further £2m provision for failings relating to a prisoner-escort deal.
Serco said Mr Lyons would leave the business once a replacement had been identified.
The former Admiral Group chairman and deputy chairman of Bovis Homes said he took “ultimate responsibility” for the “strategic and operational mis-steps” taken by Serco during this time in charge.
“Since the events of last year I have sought to stabilise Serco with strong new management and non-executive directors; a much improved relationship with the UK Government; and clarity as to our strategic direction,” Mr Lyons said.
“The contract and balance sheet review, the reassessment of the group’s future prospects, and the creation of the right capital structure are all necessary steps and giving our new management team the basis for taking the company forward again.
“The initial findings of the Strategy and Balance Sheet Review point to strategic and operational mis-steps at Serco for which, as chairman of the board since 2010, I take ultimate responsibility.
“It is also the right thing for Serco to select a new chairman, to take the helm for the future.
“Whilst colleagues have asked me not to resign, it has been my intention to step down once a new strategy and direction for the business were in place.
“I am, therefore, taking the necessary steps to ensure an orderly process for my own succession during the first half of 2015.”
Mr Soames, who joined Serco from Glasgow-based Aggreko, said Mr Lyons had worked tirelessly in recent months to secure the firm’s future.
“Whilst I respect Alastair’s decision, I want to put on record the fact that he has done an outstanding job stewarding the company through the travails of the last 12 months,” the CEO said.
“Nobody could have worked harder or done more to get us to the point where we can now concentrate on building a solid future for Serco.”
Aside from the Caldeonian Sleeper contract, Serco also operates NorthLink ferries to Scotland’s outer isles and holds numerous other outsourcing contracts north of the border.