Preliminary results for the year ended 31 December 2004
Date : 01 March 2005
2004 | 2003 | ||
|---|---|---|---|
| Turnover | £1,637m | £1,556m | up 5.2% |
Profit before tax pre-amortisation | £73.9m | £67.0m | up 10.3% |
Earnings per share pre-amortisation | 12.20p | 11.03p | up 10.6% |
Profit before tax | £57.4m | £52.9m | up 8.6% |
Earnings per share | 8.37p | 7.75p | up 8.1% |
Dividend per share | 2.63p | 2.34p | up 12.4% |
Continued strong sales, profit and cash growth
- Underlying turnover (excluding disposals and contracts exited) up 14.0%
- Underlying profit before tax, amortisation and 2003 exceptionals up 16.4%
- Recommended final dividend of 1.82p, giving a total of 2.63p for the year, up 12.4%
- Group EBITDA to cash conversion of 94.9% (2003 - 80.7%)
- Free cash flow of £55.8m (2003 - £47m)
Strong organic growth
- 82% of the increase in underlying turnover came from growth in existing contracts and new wins
- Continued win rates of over 90% on rebids and over 50% on new bids
- Contracts won valued at £4.1bn, including £2bn share of Northern Rail franchise, Electronic Monitoring and FAA Air Traffic Control Towers
Acquisitions strengthen our capabilities where we see strong organic growth opportunities
- ITNET plc - one of the UK's leading suppliers of IT and business process outsourcing services to local authorities, with expected 2004 sales of £209m
- Resource Consultants Inc (RCI) - supplier to US federal government of business process management and IT services, with expected 2004 sales US$293m
- ITNET acquisition completed in February 2005. RCI expected to complete in March 2005
High visibility of future earnings
- Record forward order book of £12.7bn at year end
- 91% of 2005 planned turnover secured, 76% for 2006, 64% for 2007
- Bids worth £4.7bn submitted and under evaluation
- Strong start to 2005 with new wins of £0.4bn and contracts at preferred bidder valued at £0.9bn
- Over £16bn of further potential opportunities identified
Note: EBITDA is earnings before interest, tax, depreciation and intangible amortisation. Free cash flow is reconciled in Section 3 of the finance review.
Executive Chairman Kevin Beeston said:
"Today's results demonstrate once again how Serco's focus on customer service and relationships is building a strong business around the world. Underlying Group turnover and profit have grown by 14% and 16% - principally through high levels of organic growth. The drive for better value for money public services around the globe puts Serco in an excellent position to continue its strong growth, further enhanced by our recently completed acquisition of ITNET in the UK and the planned acquisition of RCI in the US."