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Services business Serco has raised its profit forecast by millions of pounds thanks to growing demand for Covid-19 test and trace provision.

The outsourcing giant, which runs part of the NHS Test and Trace, said demand is likely to remain strong and continue for longer than had been expected.

It expects profits to be £15m higher than expected at £200m for the year.

It is the second time Serco, which also runs transport and prison services, has upgraded profits due to test and trace.

As well as tracing people who may have come into contact with those infected by coronavirus, Serco runs some of the testing sites.

The test and trace system got off to a rocky start last year and was criticised for being less effective than local public health teams.

Earlier this year, Serco's chief executive, Rupert Soames, admitted test and trace had experienced a "bumpy start".

Serco said on Monday all four of its divisions were trading in line for ahead of their budgets in the first five months of the year.

It singled out test and trace, saying in its statement: "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."

Another of Serco's divisions services Ministry of Defence facilities, including that at Brize Norton. Serco also said on Monday that had been granted another £900m contract, but said this would not have "any material impact on our profits in 2021".

Mr Soames said at the time of the results in February that work from the pandemic contributed less than 1% of profit, although he conceded that it added £350m of revenue.