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We aim to be the best partner to work with, the company people aspire to work for and a company that delivers superior returns to its shareholders
Our vision is to be the leading service company in our chosen markets.

Serco's vision

is to be the world's greatest service company


With investors, as with customers, we seek long term relationships based on transparency, honesty and clarity. Through this site we aim to keep both institutional and private investors up to date about our business.

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2014 Full Year Results

Year ended 31 December20142013
Revenue (note 1)3,955m4,284m
Trading (Loss)/Profit (note 2)(632m)257m
Operating (Loss)/Profit Before Exceptional Items(656m)236m
Operating (Loss)/Profit(1,317m)146m
EPS Before Exceptional Items (basic)(135.0p)32.7p
EPS (basic)(258.4p)20.1p
Dividend Per Share3.10p10.55p
Free Cash Flow62m63m
Net Debt (including that for assets and liabilities held for sale)682m745m

Note 1: Revenue is as defined under IFRS.  Adjustments are no longer made to include Serco's share of revenue from its joint ventures.
Note 2: Trading Profit is defined as IFRS Operating Profit adjusted for (i) amortisation and impairment of intangibles arising on acquisition and (ii) exceptional items.  Adjustments are no longer made to exclude Serco's share of joint venture tax and interest, management estimation of charges related to UK Government reviews or transaction-related costs.  A reconciliation to former non-GAAP measures is included in the Finance Review.

  • Revenue and profitability in line with revised expectations as set out on 10 November 2014; guidance for 2015 maintained
  • Overall financial result reflects 1.3bn  of onerous contract provisions, asset impairments and other charges, broadly in line with the November estimate; Trading Loss of 632m includes 745m of such charges; Operating loss of 1,317m includes 661m of exceptional items, driven by impairment of goodwill and other balance sheet charges together totalling 541m
  • As outlined in November, a proposed equity rights issue of approximately 555m, fully underwritten, is being launched today, with details provided in a separate announcement and the accompanying Prospectus
  • Agreements reached with lending banks and US private placement noteholders, subject to successful completion of the rights issue announced today, to refinance existing facilities including the reduction of gross indebtedness by up to 450m
  • Strategy Review complete: Serco's future to be as an international Business-to-Government (B2G) business, specialising in public service provision
  • Corporate Renewal Programme established and a substantially new management team put in place

Rupert Soames, Serco Group Chief Executive Officer, said: "2014 has been an extremely difficult year for Serco, and the magnitude of the provisions, impairments and other charges reflects the scale of the challenges we have had to face.  However, there is a real sense that, having confessed our sins and in taking the punishment, we are now ready to start on the path to recovery.  We have all we need: a good plan, strong management to execute it, and, following the successful completion of our proposed rights issue and refinancing, a balance sheet that is an appropriate foundation on which to implement our new strategy.

"We are convinced that our strategy will deliver over time value to our shareholders, customers and colleagues alike.  We will focus on providing public services to government and other bodies across five core sectors - Justice & Immigration, Defence, Transport, Citizen Services and Healthcare - and do so across some of the largest public services markets in the world.  By concentrating on these markets, we are playing to our strengths.

"Asking shareholders for financial support, and lenders to adjust terms on their facilities, is not a position any management would want to be in.  But we are determined to repay the confidence and support shown to us, to the benefit of all."

A presentation for institutional investors and analysts was held on 12 March at JPMorgan, 60 Victoria Embankment, London EC4Y 0JP.  The presentation is available to download and the webcast is available on demand.  A dial-in facility was also available on +44 (0) 20 3427 1905 (USA: +1646 254 3364) with participant pin code 5666885.

Download the full statement.

Download Presentation

Listen to the webcast.

Last Updated: 01 June 2015