2006 Interim Results Announcement
Date : 31 August 2006
Six Months of Strong Growth
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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