Thursday 22 February 2018

Serco continues to navigate choppy waters

SercoSerco’s year end results give us another opportunity to check in on where it sits on its transformation journey.

Group revenues for HY 2017 were down 2% to £2,958m (FY 2016 £3,048), comprising a 6% organic decline from contract attrition that is partially offset by a 4% currency benefit. Underlying operating profit was also down 19% to £69.8m for FY 17 (£82.1m FY 16) but was at the top end of the guidance given at the start of the year. Net debt within the group is also lower than expected and crucially the pension scheme remains fully funded.

Contract attrition during the year has certainly impacted both revenue and profit but the big plus is that sales have held up in a tough market. Serco signed new contracts with a total value of £3.4bn during the year (2016: £2.5bn). The largest new contract signed was to operate the New Grafton Correctional Centre in New South Wales (see Serco signs largest ever contract worth £1.5bn), which when completed, will be the largest correctional facility in Australia. Subscription service clients can read more …

Posted by Marc Hardwick at '09:26' - Tagged: publicsector   bps