Outstanding year with firm foundations for revenue and margin increases going forward

Further strong growth

• Organic revenue growth of 19.4% and organic PBTA growth of 13.1%
• In 2005, contract wins and extensions of £2.6bn secured and appointed preferred bidder on contracts valued at a further £2.4bn
• Continued win rates of over 90% of rebids and over 50% of new bids
• Acquisitions of ITNET and RCI added £333.9m to revenue and £23.6m to PBTA (£10.3m after funding costs)
• Group EBITDA to cash conversion of 90% contributing to Group free cash flow of £73.8m (2004: £55.8m)    

Rapidly developing capabilities and markets

• ITNET and RCI have added new skills and capabilities and taken us into new and growing markets
• Leveraging Group-wide capabilities to win large and technical contracts - Cyclamen (£100m) and Small Business Service (£125m)
• Increasing range of drivers expanding our markets around the world    

High visibility of future revenue

• Forward order book at a record £13.4bn at 31 December 2005
• 91% of planned revenue for 2006, 77% for 2007, 64% for 2008
• None of our ten largest contracts due for rebid before end of 2010
• Encouraging start to 2006 - appointed preferred bidder for £1.0bn Marine Services rebid    

Continuing positive outlook

• Unprecedented range of market opportunities
• In excess of £21bn of opportunities identified across our markets
• Selective bidding, portfolio management and efficiency will contribute to increasing margins
• Confident of double-digit growth for the foreseeable future    

Note: Organic growth excludes the impact of acquisitions and disposals, as included in the Finance Review.PBTA is profit before tax and intangible amortisation.  Group EBITDA is earnings from subsidiaries before interest, tax, depreciation and intangible amortisation. Cash conversion is the ratio of Group operating cash flow to Group EBITDA. Group free cash flow is from subsidiaries and joint venture dividends and is reconciled in Section 4 of the Finance Review.

Commenting on the results, Kevin Beeston, Executive Chairman of Serco, said:

"2005 was an outstanding year for Serco. Markets continue to grow, primarily driven by governments' needs to control spending and improve the quality of public services. Our public service ethos and commitment to partnership enable us to win more than 90% of rebids and 50% of new bids. This success is built on a firm foundation: consistent, high quality service to satisfied customers.  Our balanced portfolio, spread across our chosen sectors and international markets, allows us to target the best opportunities. The forward order book stands at a record level and none of our ten highest revenue contracts are due for rebid before the end of 2010. We remain confident of continuing double-digit growth and increasing margins."

- Ends -

For further information please contact Serco Group plc: +44 (0) 1256 745 900
Richard Hollins, Head of Investor Relations
Dominic Cheetham, Corporate Communications Director
www.serco.com

Presentation and Conference Call
A presentation for investors and analysts will be held at JP Morgan Cazenove, 20 Moorgate, London EC2R 6DA, at 9.30am.
A conference call for investors and analysts will be held today at 14.30 UK time.
Participants outside the US should call: +44 (20) 7019 0810
US participants should call: +1 210 795 0466
The passcode for the conference call is 'Serco'
Copies of the presentation slides will be available from 12.00 UK time from www.serco.com.