The outsourcing company Serco has upgraded its profit forecast thanks to continuing strong revenues from its lucrative contract to run parts of the government’s Covid-19 test-and-trace service. The company on Monday said its underlying trading profit for 2021 would be £15m higher than previously thought, at about £200m. Shares rose 5% in early trading, making Serco the top riser on the FTSE 250. Serco runs large parts of the largely privatised service, which is labelled as NHS test and trace. It runs a quarter of the testing sites and half the “tier 3” contact tracers, who are mainly tasked with phoning the contacts of people who have tested positive. The outsourcing firm’s appointment to run parts of the test-and-trace system has proved controversial. The Labour party leader, Sir Keir Starmer, described as “outrageous” Serco’s decision to pay investors a £17m dividend that was funded partly by pandemic profits. Serco has also confirmed it has passed information to HM Revenue and Customs over the possible use of “mini-umbrella companies”, structures that have been subject to warnings over tax dodging. Serco has ordered suppliers to ensure they directly employ workers after the Guardian uncovered evidence of the structures across the test-and-trace system. In February, Serco acknowledged it had “benefited” from the test-and-trace contract. While the government has allowed it to make lower profits than usual on that contract, the extra £350m of revenues has made up for the impact of the pandemic in other areas. The Serco chief executive, Rupert Soames, and the chief financial officer, Angus Cockburn, were given pay of £7.4m for 2020, including bonuses worth £5.5m. In a statement to the stock market on Monday, Serco said: “The strong performance we saw at the beginning of the year has continued. All of our four divisions have traded in line or ahead of their budgets in the first five months of the year. “In the UK in particular, volumes on both our testing and tracing contracts have continued to be strong and we now think it likely that demand for these services will continue for longer in the second half than we previously anticipated.” Serco also announced that a joint-venture with the French energy company Engie had won another large government contract running 19,000 buildings across 200 sites for the UK’s Ministry of Defence. The contract will be worth more than £900m over seven years.