Outsourcing giant Serco has reported a pre-tax loss of £7.3 million after poor trading in the first half of the year.
During the same period in 2013, the company made pre-tax profits of £106 million. However, Serco says profits were in line with its revised expectations and net debt fell by a greater-than-expected amount.
The firm's adjusted operating profit fell to £50.7 million in the six months to 30 June. Serco has been hit by a six-month ban on UK government contracts following a scandal surrounding the company's use of electronic tags on prisoners.
Rupert Soames, Serco Group chief executive officer, said good progress is being made on the company's strategy review, while relations with the government are on the mend.
"Many challenges remain, and we have a lot of work to do, but I am confident that, in time, we can restore the company's fortunes," he added.