Results Information
Strong performance and attractive markets
Serco Group plc – 2008 Interim Results
2008 | 2007 | ||
|---|---|---|---|
| Revenue | £1,491m | £1,349m | up 10.5% |
| Adjusted profit before tax | £67.3m | £56.2m | up 19.8% |
| Profit before tax | £62.8m | £52.0m | up 20.8% |
| Adjusted earnings per share | 10.18p | 8.48p | up 20.0% |
| Earnings per share | 9.35p | 7.71p | up 21.3% |
| Dividend per share | 1.48p | 1.23p | up 20.3% |
| Group free cash flow | £33.0m | £28.8m | up 14.6% |
Continuing progress in existing and new markets
- Signed £2.0bn of contracts in the period
- Strong international performance - overseas contracts of more than £700m signed
- Win rates of one in two for new bids and 90% of rebids
- Significant new market wins - Dubai Metro (£500m); Glasgow City Council partnership (£265m)
- Increased presence in existing markets: environmental services - London Borough of Hammersmith & Fulham(£140m); light rail - Al Safooh (preferred bidder, £120m); defence support - UK Naval Air Command (£76m); US defence - Aviation Technical Maintenance and Support Services (US$167m); Australia Garrison Support (AUS$175m)
Strong financial performance
- Revenue growth of 10.5%
- Adjusted profit before tax (Adjusted PBT) margin increase of 30 basis points to 4.5%
- Group free cash flow increase to 14.6% to £33.0m
Agreement to acquire SI International positions Serco in substantial US government services market
- Agreement (subject to shareholder and regulatory approvals) to acquire SI International, a US government services provider, for approximately US$423m, creates a strong platform across the US armed forces and civil federal government agencies
- Further details are given in a separate press release issued today
Substantial contract base underpins excellent revenue visibility
- Order book of £15.1bn at 30 June 2008
- Preferred bidder of £0.8bn of contracts
- Visibility of 99% of planned revenue for 2008, 83% for 2009 and 73% for 2010
- £26bn of further opportunities identified
Growing markets support confident outlook
- Increasing demand for our skills in UK and international markets
- Drivers include government efficiency programmes, demand for better public services and global challenges including migration, climate change, security and congestion
- Remain confident of double-digit revenue growth for 2008 and the foreseeable future
- Guidance reiterated for current business for 30 basis point increase in Adjusted PBT margin in 2008 and 2009
Christopher Hyman, Chief Executive of Serco Group plc, said: "Our growth strategy is founded on our ability to deliver excellent service, build relationships, enhance our capabilities and select the right opportunities. We have made a strong start to 2008 and we see excellent growth opportunities ahead as our customers experience increasing global economic and social pressures. In the US market, the proposed acquisition of SI International will enhance our scale, capabilities, relationships and market access in the world's largest contracting market."
Note: adjusted profit before tax and Adjusted earnings per share shown above are before amortisation of acquired intangibles as shown on the face of the Group's income statement and the accompanying notes. Group free cash flow is from subsidiaries and joint venture dividends and is reconciled in Section 3 of the Finance Review.