Serco ups guidance amidst uncertainty surrounding Brexit
By Iain Gilbert
Date: Thursday 21 Feb 2019
(Sharecast News) - Outsourcing firm Serco upped its 2019 profit and revenue forecasts on Thursday following a recent series of contract wins despite the "fog of uncertainty" surrounding Brexit".
Serco now expects profits of around £105m, ahead of its previous £95m-100m estimates, while revenues were projected to rise 3-4% and hit somewhere between £2.9bn and 3bn.
In terms of its recently wrapped up trading year, Serco saw underlying profits soar 40% to £93.1m - in line with adjusted guidance.
Revenues dipped 2% to £2.8bn despite a solid second half.
Serco, which provides services such as administration, training and custody in public defence, justice, transport and health departments, has undergone a series of restructuring efforts of late, focussing on winning business abroad and cutting costs.
Since its international expansion efforts kicked off in 2014, the UK now provides just two-fifths of Serco's group revenues versus the 55% it made up five years ago.
The FTSE 250 constituent said its revenues would get a significant boost from several large international contracts, including three in Australia - the management of a correctional centre in Grafton, the design and construction of an icebreaker ship and health services in the defence sector.
As of 0815 GMT, Serco shares were up 4.35% to 120p.
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