Interim Results Announcement
Date : 31 August 2005
2005 | 2004 | ||
|---|---|---|---|
| Revenue | £1,074.9m | £804.5m | up 33.6% |
| Profit before tax and amortisation | £43.7m | £34.4m | up 27.0% |
| Earnings per share before amortisation | 6.78p | 5.53p | up 22.6% |
| Profit before tax | £37.3m | £30.7m | up 21.5% |
| Earnings per share | 5.61p | 4.84p | up 15.9% |
| Dividend per share | 0.91p | 0.81p | up 12.3% |
Strong organic growth
- Revenue before acquisitions and disposals up by 20.8%
- Profit before tax, amortisation and acquisitions up 14.5%
- Continued win rates of over 90% on rebids and over 50% on new bids
- Contracts signed valued at £0.7bn in the period, appointed preferred bidder on contracts worth a further £1.5bn
Continuing focus on cash generation
- Group EBITDA to cash conversion of 70% (2004 – 58%) contributing to Group free cash flow of £19.4m (2004 – £23.5m)
Acquisitions’ performance on target
- Completed purchase of ITNET in February and RCI in March
- Acquisitions added £134.4m of revenue and £9.3m (£4.3m after funding costs) of profit before tax and amortisation
- Management reorganisations complete, integration proceeding well and customers responding positively
High visibility of future revenues
- Forward order book of £12.9bn at 30 June 2005
- 99% of 2005 planned revenue secured, 85% for 2006 and 74% for 2007
- Bids worth £4.5bn submitted and under evaluation, including £1.7bn at preferred bidder
- In excess of £18bn of further opportunities identified
Note: Group EBITDA is earnings from subsidiaries before interest, tax, depreciation and intangible amortisation. Group free cash flow is from subsidiaries and is reconciled in Section 4 of the Finance Review
Executive Chairman Kevin Beeston said:
“This has been another excellent period for Serco. Our service delivery record has enabled us to deliver organic revenue growth of 21% and our acquisitions have made the expected contribution in their first few months under our ownership. Market conditions remain strongly in our favour and we see numerous opportunities to grow in the UK and internationally. Our actions to develop leadership, streamline our structure and improve efficiency will contribute to growth and enhance our profitability, resulting in increasing margins over time. We look forward to further strong performance in the second half and are confident of achieving double digit growth for the foreseeable future.”