Serco is rediscovering the benefits of equity by raising £120m, on the back of an upbeat trading statement.

The company believes the move will boost further development - taking advantage of the £15bn of contracts under evaluation, and reduce its net debt of £108m.

Serco announced a hike in pre-tax profits - up by 23 per cent to £41.2m last year. 'This represents a very strong performance', said Richard White executive chair. 'We remain a highly predictable business. We have already secured 82 per cent of our forecast turnover for 2002 and a significant amount beyond and continue to anticipate strong growth.'

In the leisure sector, the company has focussed on the UK and Sweden, where Serco's leisure facilities now boast almost 7.5 million visitors a year. After successfully rebidding for the Linköping leisure centre, the company also won the bid for the Växjö centre.

In the UK, Serco has been awarded two 12-year contracts with Manchester City Council, commencing on 1 April 2002 and it will operate the new English Institute of Sport facilities after the 2002 Commonwealth Games in July. A new contract has also been won to run the Basingstoke Aquadrome opening this Spring.

A 20-year management contract has been negotiated from early 2003 for a new aquatics centre in St. Helier, Jersey, part of the re-development of the island's waterfront.