Serco investors positive after trading update

Caitlin Morrison
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OUTSOURCING group Serco gave its investors an optimistic update yesterday, and said trading in the year to date has been “a little better” than expected.

Shares in the company were up by 6.53 per cent at the close after it confirmed that expectations for the year as a whole remain unchanged from those set out on 12 March.

Revenue is likely to be around £3.5bn, the group said, with trading profit around £90m and earnings before income tax, depreciation and amortisation of £160m.

Serco expects to post revenue of “not less than £1.7bn” in the first half of the year, compared to £2bn recorded during the first six months of last year.

This reduction was “driven by an anticipated organic decline, in particular reflecting the reduced volumes and rates in Australian Immigration Services”.

The group said yesterday that it had signed contracts with an aggregate total value of approximately £1bn during the first half, describing the period as “relatively quiet with few major bidding outcomes due”.

Serco boss Rupert Soames said yesterday about the update: “While our recovery is at an early stage, and there will be bumps along the road, I am confident that we are doing the right things, with a stronger balance sheet and supported by an excellent management team.”

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