18 December 2018 | Herpreet Kaur Grewal
Global services group Serco says its 2019 outlook is in line with market expectations of continued progress and this includes revenue of £2.8 billion to £2.9 billion and underlying trading profit growth of mid-single digits to be in the range of £95 million to £100 million.
In 2018 its underlying trading profit grew to 30-40 per cent to be within the range of £90m to £95m, an outcome "in line with guidance that was revised upwards in late September; closing net debt to be lower than previously expected at around £200m, with leverage improving to 1.2-1.3x".
Underlying EPS for both 2018 and 2019 likely to be a further 5-10 per cent ahead of current consensus, principally as a result of a lower effective tax rate.
Rupert Soames, Serco Group chief executive, said: "As we predicted when we set out our five-year strategy in 2015, profits have grown strongly in 2018 with margins increasing as a result of improved operational performance and cost reduction. With revenues no longer reducing, cash generation turning positive and the benefit of a strong balance sheet, we are pleased with the progress, and we expect further improvement in 2019. We expect to deliver another year of strong order intake in 2018, driven in particular by our international businesses, and our operations and transformation plans continue to deliver an organisation which is leaner, fitter and much stronger."