3rd Aug 2023 09:14
(Alliance News) - Serco Group PLC on Thursday posted double-digit growth in both revenue and profit in the first half of the year, but left its full-year guidance for the metrics unchanged.
The Hampshire-based outsourcer reported a pretax profit of GBP147.6 million in the first half of 2023. This represented significant growth of 62% against the prior year in which the company reported a profit of GBP90.9 million.
Underlying operating profit increased 14% to GBP148 million from GBP130 million. The figure benefited from strong demand for immigration services, Serco said.
Revenue in the half totalled GBP2.47 billion, up 13% from GBP2.18 billion the previous year.
Serco's order intake in the half was GBP2.1 billion, while its order book at June 30 stood at GBP14.1 billion.
"We are making good progress to deliver profitable growth over the medium term and towards achieving our strategic ambition to be the partner of choice to governments globally. Our results over the last six months are a good measure of that progress with double-digit growth in revenue and profit, backed by excellent cash generation," said Cheif Executive Mark Irwin.
As a result of its strong interim performance, Serco upgraded its guidance for 2023, predicting a better outcome on free cash flow and net debt.
Fresh cash flow is expected at around GBP150 million, improved from June's guidance, of GBP130 million. Adjusted net debt is predicted at GBP170 million, improved from previous guidance of GBP190 million.
In 2022, fresh cash flow stood at GBP159 million and net debt stood at GBP204 million.
Revenue and underlying operating profit guidance was left unchanged at "at least" GBP4.8 billion and GBP245 million, respectively. In 2022, revenue totalled GBP4.5 billion and underlying operating profit totalled GBP237 million.
Secro declared an interim dividend of 1.14 pence per share, up 21% against the year prior.
Shares in Serco were up 1.5% at 157.50p on Thursday morning in London.
By Heather Rydings, Alliance News senior economics reporter
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