Financials
International Success Builds on UK Strengths
Serco Group plc – 2007 Preliminary Results
2007 | 2006 | ||
|---|---|---|---|
| Revenue | £2,811m | £2,548m | up 10.3% |
| Profit before tax | £114.6m | £107.4m | up 6.7% |
| Earnings per share (EPS) | 16.98p | 16.62p | up 2.2% |
| Profit before tax and amortisation of intangibles | £123.2m | £105.0m | up 17.3% |
| EPS before amortisation of intangibles | 18.57p | 15.92p | up 16.6% |
| Dividend per share | 4.25p | 3.60p | up 18.1% |
| Group free cash flow | £97.6m | £85.4m | up 14.3% |
Success across our markets
- Signed £3.6bn of contracts and appointed preferred bidder for a further £1.0bn
- Record level of international awards including Dubai Metro (preferred bidder, £400m), US Postal Service ($260m), LOGCAP IV ($225m) and Borallon Correctional Centre (Aus$100m)
- Significant progress in other new markets, including Glasgow City Council strategic partnership (preferred bidder, £265m) in local authority market and e-Borders (£200m) in homeland security
- Excellent progress in existing markets, including Marine Services (£750m) in UK defence, Forth Valley (£450m) in UK integrated facilities management and Yarl's Wood (£85m) in UK home affairs
- Maintained rebid win rate at more than 90% and continued to win one in two new bids
Strong margin and cash performance
- Adjusted PBT margin up from 4.1% to 4.4%
- Group free cash flow increased by 14.3% to £97.6m
- Strong balance sheet with Group recourse net debt reduced to £137.9m
Broad pipeline supports excellent visibility
- Order book at new record of £14.7bn at 31 December 2007
- Contracts valued at an additional £1.0bn at preferred bidder stage
- Visibility of 91% of planned revenue for 2008, 76% for 2009 and 63% for 2010
- £27bn of further opportunities identified
Growing markets and higher margins underpin positive outlook
- UK and international markets continue to generate increasing opportunities
- Confident of double-digit revenue growth for the foreseeable future
- Guidance for Adjusted PBT margin of 30 basis point increase for both 2008 and 2009
Christopher Hyman, Chief Executive of Serco Group plc, said: "2007 was an excellent year. We were awarded significant contracts in existing markets and used skills developed in the UK to build positions in markets such as Australian home affairs and Middle Eastern transport. We also reaped the benefits of the capabilities we have acquired in recent years, winning record levels of work in the US, securing the prestigious e-Borders programme in the UK and one of the first local authority strategic partnerships. At the same time, we further increased our margins. This success underpins our optimism for 2008 and beyond."
Note: Adjusted profit before tax and Adjusted earnings per share shown above are before amortisation of acquired intangibles and the £11.4m gain on sale of PFI investments in 2006 as shown on the face of the Group's income statement. Group free cash flow is from subsidiaries and joint venture dividends and is reconciled in Section 3 of the Finance Review.