Serco, the outsourcing group that apologised for demanding rebates from its suppliers in the wake of public spending cuts, moved to regain the confidence of investors by unveiling £2.3bn ($3.7bn) worth of contracts that it had signed since July.

An upbeat trading statement on Monday from Serco, which provides a wide range of public services from running prisons to maintaining military bases, nudged shares in the FTSE 100 company up 8½p to 571½p.

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But the shares – among the most heavily shorted in the support services sector – remain about 7 per cent below the level at which they traded before the supplier controversy.

Serco asked for a “cash rebate” from 193 of its largest suppliers but backtracked after Francis Maude, the Cabinet Office minister who asked 53 of the government’s biggest contractors to deliver multi-million pound savings, expressed his anger.

The U-turn by Serco, which derives more than 40 per cent of sales from UK central government and also runs nuclear facilities, schools and ports, raised questions over how it would deliver savings without denting its profit margins.

However, the company reiterated that it was on track to report revenue of about £5bn in the year to the end of 2012 and an improvement in adjusted operating profit margin to about 6.3 per cent.

Mike Murphy, analyst at Numis, said the trading statement was “re-assuring” but added that doubts remained “over margin progression and cash flow performance”.

Serco said on Friday that savings would be made “through scope changes and cost efficiencies” but has declined to elaborate.

Asked about the possibility of redundancies, Serco said: “It’s too early to say if there are any going to be any job losses and we’d minimise those by redeploying people and removing vacancies.”

According to Data Explorers, 6.6 per cent of shares in Serco are out on loan, an indication of short-seller interest, up from about 2 per cent in May.

Contracts won in the second half of the year included a £650m environmental services deal with Sandwell borough council and two arrangements with the US Navy worth $130m (£81m) to provide logistics support and hazardous materials management.

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