Outsourcing giant Serco has announced a 19 per cent growth in revenue to £2.2 billion in its half-yearly results.
Its operating profit increased by 31 per cent to £116 million for the six months to June.
Serco has more than 500 contracts in 20 countries in the areas of Defence, Justice & Immigration, Transport, Health and Citizen Services. Its profits have been bolstered by the company’s involvement in NHS Test & Trace Covid-19 services.
The company's chief executive Rupert Soames insisted last year that the impact of the pandemic on Serco’s profits was a "big fat zero". Serco upgraded its profit guidance in June when it anticipated more demand than previously from its contract to run some government Test and Trace services.
Announcing an interim dividend of 0.8p per share to investors, the first since 2014, Soames said the business had grown rapidly in the past two years, with its balance sheet boosted by its acquisitions of US firm Whitney, Bradley & Brown and facilities and cleaning firm Facilities First Australia.
The statement says that around 17 per cent of Serco’s revenues for the half-year were from work supporting the NHS Test & Trace system.
Soames commented: “These are very strong results, with revenue up 19 per cent, underlying trading profit up 58 per cent, and free cash flow up 61 per cent. We have had extremely strong order intake, and the book-to-bill ratio was 190 per cent, which bodes well for the future. Our three largest divisions – Asia-Pacific, North America and UK & Europe – all delivered good growth, and this reflects both the trust our government customers have shown in us during the pandemic, and Serco’s ability to respond to their requirements with speed and at scale.”
He added: “Serco has grown very rapidly in the past two years, made possible by the investment we have made since 2014 in transforming our culture, systems and processes, re-gaining the trust of our customers, and building a strong and experienced management team. Over 60 per cent of our profits now come from outside the UK, which reflects the success we have had in developing our businesses around the world.”
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