1st Dec 2016 07:47
LONDON (Alliance News) - Outsourcer Serco Group PLC on Thursday confirmed its guidance for 2016 following in-line trading in the second half and said it anticipates higher revenue but lower underlying profit in 2017.
The FTSE 250 group noted that better trading performances and currency movements in 2016 resulted in it upgraded its guidance for the year twice already.
It kept to that revised guidance on Thursday, anticipating revenue of GBP3.00 billion and underlying trading profit, stripping out any exceptional items, of no less than GBP80.0 million for the full year.
For 2017, Serco anticipates revenue will be around GBP3.10 billion and underlying trading profit will be between GBP65.0 million and GBP70.0 million. It said, however, the range of possible outcomes for 2017 is wider, both to the upside and downside, given the group's low margins and sensitivity to small changes in revenue or costs.
Ahead of a capital markets day event Serco that will host on Thursday, the group said its order book has increased to around GBP8.00 billion, from GBP7.30 billion at the end of June, and it continues to expect to return to a "growth" phase for the business some time in 2018.
"2016 has seen a lot of hard work and the successful resolution of a number of commercial issues which will result in underlying trading profit materially better than we expected at the start of the year, and which will be in line with the increased guidance we gave in August," said Rupert Soames, Serco's chief executive.
"Our view of the underlying outlook for 2017 remains unchanged, which means that we are continuing to make good progress with the execution of our strategy for the long-term turnaround of Serco," he added.
The update came as Serco said it has now signed the GBP600.0 million, ten-year contract to provide soft facilities management services to Barts Health NHS Trust. Serco had been named preferred bidder for the contract in September.
Under the deal, Serco will handle cleaning, laundry, patient catering, car parking and reception services, amongst others.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
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