Serco profit hit by reshuffle and slow US market

City A.M. Reporter
Outsourcing group Serco said recent contract wins would help it deliver a strong full-year performance, after reorganisation costs and delays in the award of US federal work pushed first half profit down 17 per cent.

The British firm, which runs services from London's light rail to prisons and air traffic control centres around the world, today reported an adjusted pre-tax profit of £102.1m for the six months to the end of June, in line with analyst forecasts.

Serco said it had won £4.2bn worth of work in the period, compared with £2.5bn a year ago, and had increased its order book – the value of future revenues based on all existing signed contracts – to 19.4bn.

British and US markets have been hit by budgetary delays with austerity measures in the UK slowing the flow of public sector work and a presidential election impacting US spending plans.

Revenue rose 4.3 per cent to £2.34bn, underpinned by last year's acquisitions and good growth in Australasia and the Middle East, it said.

Sales in the US slipped 16 per cent, while in its core UK market, where it said conditions were improving, revenue dropped one per cent.