You are here

Prices & Quotes - UK Markets - Serco Group (SRP)

Risk Warning The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.

Share Price:
Up 117.80p
Change Today:
4.20p
Market Cap:
1,452.92m
Sector:
Support Services

Serco lifts revenue and profit guidance after strong third quarter

By Josh White

Date: Friday 16 Oct 2020

LONDON (ShareCast) - (Sharecast News) - Serco reported strong revenue growth in its third quarter on Friday, along with good cost control, leading to an upgrade of its full-year revenue guidance to around 3.9bn, and underlying trading profit to between 160m and 165m.
The FTSE 250 outsourcing specialist said that would represent organic growth in revenues of around 15%, growth in underlying trading profit of more than 30%, and an underlying trading profit margin of just above 4%.

It said the range of outcomes around those numbers was wider than would normally be the case, as on some contracts customers were adjusting their requirements week-by-week in response to the challenges of Covid-19.

"All of our regions worldwide are performing better than we expected and have increased their forecasts for 2020," the board said in its statement.

"In both group and in the divisions, effective cost control and the ability of our systems to respond efficiently to increased demand has helped increase margins."

Serco said that in the United States, it had seen strong performances across a number of contracts, including its Center for Medicare and Medicaid Services (CMS) contract, the US Federal Emergency Management Agency (FEMA) contract and the Anti-Terrorism/Force Protection (ATFP) framework contract for US Naval Facilities.

In the UK, it was awarded extensions to its contracts to provide test sites and call handlers for NHS Test & Trace, which the board described as an indication of the customer's satisfaction with the quality of work delivered.

It also saw increases in the number of asylum seekers it was looking after on behalf of the Home Office, and its new Prisoner Escorting contract had been successfully mobilised.

The company also secured an extension to the Emergency Measures Agreement on the Caledonian Sleeper train service to the end of the year.

!In Australia, restrictions on movement as a result of Covid-19 has meant additional work for both our immigration services and our Citizens Services businesses.

"In the Middle East, there has been an increase in project-related work on rail and facilities management contracts."

Looking at its financial position, Serco said cash generation in the third quarter was also better than expected and, in particular, there had been an "almost complete" catch-up on delays in processing billings on its FEMA contract in the US, which held back cash generation in the first half.

The board said it now expected adjusted net debt to be between 100m and 150m at the end of December, with leverage of around 0.6x.

Following the issue of $200m (154m) of US Private Placement loan notes, the firm said it expected headroom on its committed finance facilities to be at least 500m.

"As announced in our first half results, we intend to repay early, and probably in the next few weeks, UK Government VAT deferrals.

"Also as announced in August, we will take a decision about dividends previously withdrawn 2019 final, and deferred 2020 interim, in December."

Looking ahead, Serco said the Covid-19 crisis made forecasting "extremely" difficult.

"We expect the uncertainties of 2020 will persist into 2021 as the world grapples with recurring outbreaks of infection.

"We have only just started our budget review process, and we would not have a view concerning 2021 today which is materially different from that which we had at the time of our half year results in August."

At 0854 BST, shares in Serco were up 11.91% at 132.5p.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

Serco Group Market Data

Currency UK Pounds
Price 117.80p
Change Today 4.20p
52 Week High 169.40p
52 Week Low 102.50p
Volume 2,961,793
Shares Issued 1,233.38m
Market Cap 1,452.92m

Performance Indicators

Compare performance with the sector and the market.

Key
Vs Market
Vs Sector
Value
market
  1. full market star
  2. full market star
  3. half market star
  4. empty market
  5. empty market
sector
  1. full sector star
  2. full sector star
  3. half sector star
  4. empty sector
  5. empty sector
Price Trend
market
  1. full market star
  2. half market star
  3. empty market
  4. empty market
  5. empty market
sector
  1. full sector star
  2. half sector star
  3. empty sector
  4. empty sector
  5. empty sector
Income
market
  1. half market star
  2. empty market
  3. empty market
  4. empty market
  5. empty market
sector
  1. half sector star
  2. empty sector
  3. empty sector
  4. empty sector
  5. empty sector
Growth
market
  1. full market star
  2. full market star
  3. full market star
  4. full market star
  5. empty market
sector
  1. full sector star
  2. full sector star
  3. full sector star
  4. full sector star
  5. empty sector
Price Chg 6m
market
  1. half market star
  2. empty market
  3. empty market
  4. empty market
  5. empty market
sector
  1. full sector star
  2. empty sector
  3. empty sector
  4. empty sector
  5. empty sector
P/E
market
  1. full market star
  2. full market star
  3. empty market
  4. empty market
  5. empty market
sector
  1. full sector star
  2. half sector star
  3. empty sector
  4. empty sector
  5. empty sector
PEG
market
  1. full market star
  2. full market star
  3. full market star
  4. full market star
  5. empty market
sector
  1. full sector star
  2. full sector star
  3. full sector star
  4. full sector star
  5. empty sector
Dividend Yield
Not Available
EPS Growth
market
  1. full market star
  2. empty market
  3. empty market
  4. empty market
  5. empty market
sector
  1. full sector star
  2. empty sector
  3. empty sector
  4. empty sector
  5. empty sector
Operating Margin
market
  1. full market star
  2. half market star
  3. empty market
  4. empty market
  5. empty market
sector
  1. full sector star
  2. half sector star
  3. empty sector
  4. empty sector
  5. empty sector

What The Brokers Say

Strong Buy 13
Buy 0
Neutral 0
Sell 0
Strong Sell 0
Total 13
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Serco Group Dividends

No dividends found

Trades for 01-Dec-2020

Time Volume / Share Price
16:35 1,303 @ 117.80p
16:35 3,825 @ 117.80p
16:35 1,277,367 @ 117.80p
16:29 16 @ 117.60p
16:29 72 @ 117.70p

Serco Group Key Personnel