LONDON (ShareCast) - (Sharecast News) - Serco reinstated financial guidance as the government outsourcer said it expected an increase of about 50% in first half profit based on strong revenue growth.
The FTSE 250 company said underlying trading profit for the first half would be £75-£80m, up from £51m a year earlier. Revenue will increase by about 23% to £1.8bn reflecting the acquisition of NBSU in 2019 and organic growth of about 14%.

Serco withdrew financial guidance in early April as the Covid-19 crisis mounted but in an unscheduled update it said the picture was now clear enough to steer investors on its performance.

Annual revenue will be about £3.7bn compared with scrapped guidance of £3.4bn-£3.5bn and organic sales growth will be about 9%, up from earlier guidance of 4%, Serco said. Underlying trading profit will be between £135m and £150m compared with previous guidance of about £145m.

Serco shares rose 12.7% to 149.90p at 08:19 BST and were the biggest gainers in the FTSE 350 index.

Orders were about £1.8bn in the first half, broadly in line with revenue, Serco said. Revenue growth was boosted by business outside the UK from contracts won in 2019, the company said.

Rupert Soames, Serco's chief executive, said: "The company is expected to deliver a very strong performance in the first half. Being able to reinstate guidance for the full year reflects the resilience of our business, which depends for its revenues on governments rather than businesses or consumers, our strong order book, and growing confidence that our people and systems can adapt effectively to the challenges of Covid-19. Clearly, there is a more than normal degree of risk in our guidance, but we feel it better that we give some indication rather than none."

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE