Service provider Serco has posted its latest financial results, reporting that it has seen revenue growth of 19 per cent and organic growth of around 15 per cent in the latest financial year.
It stated that underlying trading profit was more than 50 per cent higher than the first half of 2020 at £120m-£125 million.
All four regions were trading ahead of last year and underlying trading profit margin is likely to be greater than 5 per cent.
Rupert Soames, chief executive of the Serco Group, said: “Serco’s performance in the first half underlines the trust governments around the world place in us, and our ability to respond at scale and pace to rapidly-changing requirements. We expect to deliver revenue growth in the first half of nearly 20 per cent, and Underlying Trading Profit growth of more than 50 per cent; just as pleasing, our order intake will be at record levels at almost £4 billion, including large new contracts with the UK Ministry of Defence, the Department of Work & Pensions and the Royal Canadian Airforce. Despite being exceptionally busy responding to strong demand for our services, we also completed two important acquisitions in the United States and Australia in the period.
“For the year as a whole, we expect to deliver underlying trading profit of around £200 million, or nearly 30 per cent growth in constant currency. Profits will be weighted to the first half, and will include contributions from the WBB and FFA acquisitions, which will enable us to absorb the impact of the end of the AWE contract, the mobilisation costs of the recently-signed DWP contract and an expected reduction in Covid-19-related activities. We also intend to take advantage of the current strong trading to temporarily increase our rate of investment in our systems platform, cyber resilience, and business development spend to respond to a strong pipeline of opportunities.”
Serco's results also state that it expects revenue of around £2.2 billion in the first half of 2021, 19 per cent higher than the £1.8 billion reported in the first half of 2020 and it added that £340 million of its first-half revenues are expected to be related to Covid-19, which compares to £80 million in the prior year. The acquisitions of FFA and WBB have added 5 per cent to its revenue, while currency is expected to have a 1 per cent adverse impact.