Preliminary Results Announcements
Date : 28 February 2007
Excellent Year, Compelling Future
Serco Group plc - 2006 Preliminary Results
| 2006 | 2005 | ||
| Revenue | £2,548.2m | £2,260.3m | up 12.7% |
| Profit before tax | £107.4m | £77.9m | up 37.9% |
| Earnings per share (EPS) | 16.62p | 11.66p | up 42.5% |
| Profit before tax, amortisation and gain on sale | £112.2m | £91.5M | up 22.6% |
| EPS before amortisation and gain on sale | 17.13p | 14.09p | up 21.6% |
| Dividend per share | 3.60p | 2.97p | up 21.2% |
| Group free cash flow | £85.4m | £73.8m | up 15.7% |
Excellent performance
- £3bn of business signed including Docklands Light Railway (£400m), Defence Science & Technology Laboratories (£500m), London Development Agency (£69m) and Acacia Prison (AUS$155m)
- Appointed preferred bidder on £1.9bn of contracts, including Future Provision of Marine Services (£1bn) and Forth Valley Hospital (£450m)
- Continued to win one in two new bids and maintained rebid win rate at more than 90%
- Created strategic Private Finance Initiative (PFI) investment partnership. Sold six PFI investments for £76.5m with £11.4m gain on sale and retained associated operating contracts
- PBTA margin before gain on sale of PFIs of 4.4%, up from 4.0% in 2005
- Group EBITDA to cash conversion of 98% resulting in 15.7% increase in group free cash flow
Significant visibility of future growth
- Forward contracted order book of £13.9bn at 31 December 2006
- Contracts valued at an additional £3.5bn at preferred bidder stage
- Visibility of 91% of planned revenue for 2007, 77% for 2008 and 64% for 2009
- £23bn of further opportunities identified
Continuing positive outlook
- Unprecedented market opportunities driven by social demands for better public services and reduced tax burden, aligned with the impact of global challenges of security, migration and the environment
- Increasing capacity to grow through deep relationships and capabilities allows us to be confident of double-digit growth
- Continued focus on portfolio management, selective bidding and efficiency will contribute to rising margins
Kevin Beeston, Executive Chairman of Serco Group plc, said: "I am delighted with the Company's performance in 2006. The strength of Serco's reputation and our expertise and ability to deliver high-quality service have seen us deliver tremendous outcomes for customers and excellent results for investors. I am excited by our performance and by the range of opportunities available to us that combined, position us for strong growth. We remain confident of maintaining double-digit growth and improving margins."
Note: PBTA is profit before tax and intangible amortisation. Group EBITDA is earnings from subsidiaries (excluding joint ventures) before interest, tax, depreciation, intangible amortisation and other non cash items. 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.
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