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2006 Interim Results Announcement

Date : 31 August 2006

Six Months of Strong Growth

Serco Group plc – 2006 Interim Results
2006
2005
Revenue
£1,236m
£1,075m
up 15.0%
Profit before tax and amortisation
£52.5m
£43.7m
up 20.1%
Earnings per share before amortisation
8.06p
6.78p
up 18.9%
Profit before tax
£44.8m
£37.3m
up 20.1%
Earnings per share
6.69p
5.61p
up 19.3%
Dividend per share
1.05p
0.91p
up 15.4%
Group free cash flow
£25.8m
£19.4m
up 33.0%

Strong Performance

  • £1.3bn of contracts signed in the period, including Docklands Light Railway rebid (£400m), London Development Agency (£69m) and Acacia Prison (AUS$155m)
  • Appointed preferred bidder on £1.9bn of contracts, including Future Provision of Marine Services (£1.0bn) and Forth Valley (£450m)
  • Maintained rebid win rate at over 90% and continued to win one in two new bids
  • Group EBITDA to cash conversion of 80% resulting in increased Group free cash flow        

High visibility of future revenues

  • Forward order book of £13.5bn at 30 June 2006
  • Contracts valued at an additional £3.6bn at preferred bidder stage
  • Visibility of 99% of planned revenue for 2006, 85% for 2007 and 75% for 2008        

Outlook - continuing strong growth and increasing margins

  • Governments’ need to improve service quality and reduce costs continues to drive existing markets and open up new opportunities
  • £22bn of opportunities identified
  • Confident of double-digit growth for the foreseeable future
  • Future margin growth driven by selective bidding, portfolio management and efficiency        

Commenting on the results, Kevin Beeston, Executive Chairman of Serco said:
“The unrelenting rise in citizens’ expectations together with an ever-increasing requirement for value-for-money public services leaves Serco confident of continued double-digit growth. Favourable markets allow us to bid selectively, which together with improvements in operating efficiencies means margins will continue to rise.”

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Last Updated: 21 July 2008