Six Months of Strong Growth

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.”