Shop Direct BPO Contract

Serco agrees significant new BPO contract with leading UK retailer

9 May 2012

Serco Group plc (Serco), the international service company, announces that it
has reached an agreement and expects to sign today a significant new Business
Process Outsourcing (BPO) contract to provide and enhance the efficiency of
customer contact services for Shop Direct Group (Shop Direct), the UK's leading
online and home shopping retailer. The ten-year contract will start on 1 July
2012 and has a total estimated value to Serco of approximately £430m.

Under the contract, Serco will assume responsibility for managing customer
contact across Shop Direct's brands. The partnership will work together to
significantly enhance service levels and efficiency through the investment in
the latest technology, such as web chat and mobile digital services, which are
designed to seamlessly integrate online and mobile into customer contact
management.

Changing customer shopping, contact and servicing patterns have led to a major
shift in channel preference. These changes, together with the need to increase
efficiency, led Shop Direct to undertake a complete review of its customer
service needs, the result of which was the appointment of Serco to provide its
future customer contact programme. This draws and substantially builds on the
successful contract that The Listening Company currently has with Shop Direct,
where consistently high levels of performance have been achieved.

The contract represents a significant further step forward for Serco's recently
formed Global Services business, which combines the capabilities from Intelenet
and The Listening Company as well as the additional scale advantage from
Serco's other BPO operations. Our proposal includes a blend of on-shore and
off-shore service provision. Around 1,800 contact centre and administration
employees will transfer to Serco.

The proposed service provision transitions in stages over the first two years
of the contract's operation. The timing of costs associated with implementing
transitional arrangements are expected to drive an additional working capital
out flow for Serco estimated in total at approximately £25m over the initial
two years.

Mark Newton-Jones, Group Chief Executive of Shop Direct, said: "The ways in
which customers are shopping with us, contacting us and servicing their
accounts have changed rapidly, driven by revolutionary advances in digital and
interactive technology. We have chosen to work with Serco as they are an
acknowledged leader in this field. Serco's expertise, coupled with their
investment in technological innovation, will ensure that we have a customer
contact programme that is flexible and adaptable for the increasingly online
and mobile world that we live in."

Christopher Hyman, Chief Executive of Serco Group, added: "Today's announcement
with a major organisation such as Shop Direct is testament to the significant
development of our Global BPO strategy. Serco will bring its substantial skills
and capabilities in contact service delivery to Shop Direct, further improving
the customer experience through investment in technological innovation and
increased efficiency. Our selection for this contract clearly demonstrates the
strength and success of our customer contact scale and expertise. It is also a
major advance for Serco in the retail and financial services markets and builds
on the back of our recent wins with Freemans Grattan Holdings and Ideal
Shopping."

A consultation period regarding the TUPE transfer will begin shortly with the
individuals affected by these proposals and their trade union and management
representatives. The TUPE transfer date is 1 July 2012.

Ends

For further information please contact Serco:

Stuart Ford, Head of Investor Relations T [phone]

Marcus De Ville, Head of Media Relations T [phone]

About Serco

Serco is a FTSE 100 international service company, which combines commercial
know-how with a deep public service ethos.

Around the world, we improve essential services by managing people, processes,
technology and assets more effectively. We advise policy makers, design
innovative solutions, integrate systems and - most of all - deliver to the
public.

Serco supports governments, agencies and companies who seek a trusted partner
with a solid track record of providing assured service excellence. Our people
offer operational, management and consulting expertise in the aviation, BPO,
defence, education, environmental services, facilities management, health, home
affairs, information and communications technology, knowledge services, local
government, science and nuclear, transport, welfare to work and the commercial
sectors.

More information can be found at www.serco.com