UK's Serco 2025 revenue slightly beats estimates, announces £75 mln buyback

Serco

05/03/2026 07:13

Overview

UK-based government services provider's 2025 revenue slightly beat analyst expectations

Underlying operating profit rose 1% at constant currency, driven by contract wins

Company announced a new £75 mln share buyback

Outlook

Serco expects 2026 revenue of ~£5.0 bln with ~3% organic growth

Company anticipates 2026 underlying operating profit of ~£300 mln, up 10% from 2025

Serco announces new £75 mln share buyback to be completed by half-year results

Result Drivers

DEFENCE CONTRACTS - Significant contract wins in defence sector drove revenue growth, contributing two-thirds of £5.5bn order intake

MT&S ACQUISITION - Acquisition of MT&S contributed to revenue and profit, enhancing defence and space capabilities

Company press release: ID:nRSE4034Va

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
FY Revenue
Slight Beat*
GBP 4.88 bln
GBP 4.87 bln (12 Analysts)
FY Free Cash Flow
GBP 219 mln
FY Net Debt
GBP 710 mln
FY Operating Profit
GBP 246 mln


*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"

The average consensus recommendation for the business support services peer group is "buy"

Wall Street's median 12-month price target for Serco Group PLC is GBp320.00, about 5.4% above its March 4 closing price of GBp303.60

The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 15 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)