Serco Sticks to 2024 Revenue and Profit Targets Despite US Delays
Serco's Financial Performance and Market Overview
June 24 (Reuters) - British outsourcing group Serco on Thursday reiterated its annual revenue and profit forecast as growth in its UK home market and in Europe offset persisting procurement delays in the United States.
The provider of defence, security, immigration, healthcare and transport services to governments has benefitted from a surge in contract activity as countries boost defence spending amid rising geopolitical tensions.
Key Details and Company Statements
Here are some more details:
North American Market and US Procurement Delays
• "While procurement delays in the U.S. have continued into the first half, we remain confident in the structural drivers of demand which have supported further expansion of our North American pipeline," the company said.
Middle East Business Impact
• The Middle East business, which contributes roughly 4% to Serco's revenue, was partially affected by the regional conflict, leading to some reductions in activity and revised contracts.
Financial Forecasts and Performance Metrics
First Half Expectations
• For the first half of the year, Serco expects underlying operating profit to rise by 6% to around £155 million and revenue to be about 3% higher than in the same period in 2025 at £2.5 billion.
Full-Year Forecast
• Serco forecast full-year revenue of about £5 billion, with organic growth of around 3%, and underlying operating profit of about £300 million, in line with the average analyst estimate of a company-compiled poll.
Share Price Performance
• Shares of the FTSE 250-listed company have declined ~16% YTD, underperforming the midcap index which gained ~3% during the same time frame.
(Reporting by Neeshita Beura in Bengaluru; Editing by Ronojoy Mazumdar)
