12 December 2019 | Herpreet Kaur Grewal
Facilities management group Serco has reported that it expects to deliver around 14 per cent growth and 30 per cent underlying trading profit growth, according to its closed period trading update for the 2019 financial year.
It reported that there was strong revenue growth, particularly in the second half of 2019, with revenue expected to grow to £3.2 billion, comprising 7 per cent organic growth.
Second half revenue growth expected to be approaching 20 per cent, of which approximately 10 per cent will be organic growth, and 8 per cent as a result of the five months of contribution of the Naval Systems Business Unit (NSBU) acquisition.
Total revenue growth includes an approximate 5 per cent contribution from acquisitions. This comprises 4 per cent from the initial five months' contribution of the NSBU acquisition, which was completed on 1 August 2019, and 1 per cent from the annualisation of the Carillion health facilities management contracts that transferred to Serco between June and August 2018.
The outlook for 2020 shows further strong growth is expected in revenues and profits, the update said.
Rupert Soames, Serco Group chief executive, said: "The results that we expect to report for 2019 will represent the second successive year of strong growth in revenue and profits, while our positive outlook for 2020 means that we expect to double our Underlying Trading Profit from the £69m achieved in 2017 to the £145m we plan to deliver in 2020."
Soames added: "The UK delivered a good performance, returning to organic growth in the second half, which is the first time since 2013. Perhaps the most notable aspect of 2019, however, is the record order intake of over £5bn, representing over 150 per cent of annual revenues, which demonstrates the confidence our customers have in us to deliver critical, sensitive and complex public services. Between the start of 2017 and the end of 2019, our order book will have increased by more than 40 per cent from £10bn to over £14bn."