Serco, one of the outsourcing companies behind the heavily criticised NHS coronavirus test-and-trace programme, will consider paying a dividend to shareholders after the government contract helped boost its profits. Shares in Serco surged by 18% on Friday after it said it expected to make an underlying profit for the year of between £160m and £165m. This is higher than previously forecast and an increase of more than a third on the previous year’s total. The company will make a decision in December on whether to pay a dividend. The improved performance was driven by the extension of the test-and-trace contract, as well as US government contracts for healthcare and emergency management, Serco said in an unscheduled update to the stock market. Serco was one of a number of private firms hired by the UK government to test people for coronavirus and trace their recent contacts. Serco runs a quarter of the 500 test sites around the country as well as providing handlers who call possible contacts of people who have tested positive for the virus. The system has received vocal criticism for its reliance on the private sector, including multiple outsourcing companies and expensive consultancies, for a scheme that was envisaged as a key part of the UK’s effort to contain the pandemic. One of Serco’s contracts with the Department of Health and Social Care could eventually be worth up to £410m. It has faced criticism because its call handlers reached a lower proportion of contacts of people who had tested positive than local public health counterparts. Rachel Reeves, the shadow Cabinet Office minister, said: “This is grim beyond belief. While Serco is raking in the profits, people are paying the price for its failure on contact tracing. It also appears that this money is going straight into senior executives’ pockets, while shareholders and workers are left in the dark. It is utterly wasteful and impractical, that after this long line of failure, Serco has had its contract extended.” Rupert Soames, Serco’s chief executive, told the Guardian that Serco had done everything the government had asked of it, and that the broader test-and-trace system was unfairly criticised. “Part of the narrative of this is just completely wrong – this dialogue that it is all a shambles and it’s not working,” he said. “Does anybody turn around and say: ‘Wow, to go from a start and test 3.5 million people [a week]’? They’ve done bloody well – not saying error-free, but no system that tests 3.5 million people every week will be error-free.” Soames said it was up to the company whether or not to pay a dividend but that no decision would be taken until the end of the year. The GMB union, which represents some Serco workers, called for ministers to step in to move test and trace away from private companies. Rehana Azam, GMB’s national secretary, said: “We need a real public interest track-and-trace system, run by the local authorities who know their areas best, with full funding – not a malfunctioning scheme that lines the pockets of shareholders.”