UK's Serco half-year revenue and profit rise; boosts buyback to £150 mln
UK's Serco half-year revenue and profit rise; boosts buyback to £150 mln
Overview
UK government services provider's half-year revenue grew 4% yr/yr to £2.5bln
Underlying operating profit for the half-year rose 9% at constant currency
Company increased share buyback for 2026 to £150mln, £75mln completed post period end
Outlook
Serco reiterates 2026 revenue guidance at ~£5.0bln with organic growth of ~3%
Company maintains 2026 underlying operating profit guidance at ~£300mln
Serco expects adjusted net debt to end 2026 at ~£240mln, up from previous guidance
Result Drivers
DEFENCE GROWTH - Co said Defence delivered 10% organic revenue growth, supported by major programme mobilisation and infrastructure contracts
PRODUCTIVITY IMPROVEMENTS - Co attributed margin progression to productivity enhancements and cost discipline across the business
PORTFOLIO SIMPLIFICATION - Co said ongoing simplification and focus on priority sectors improved competitiveness and efficiency
Company press release: ID:nRSF4765Pa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue |
| GBP 2.50 bln |
|
H1 Adjusted EBIT |
| GBP 156.70 mln |
|
H1 Operating Profit |
| GBP 145 mln |
|
H1 Orders |
| GBP 2.50 bln |
|
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 GBp329.00, about 35.6% above its August 5 closing price of GBp242.60
The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 15 three months ago
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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.)