Serco is a Public Limited Company (PLC), incorporated in the UK and listed on the Main Market of the London Stock Exchange (LSE). Our owners are those who hold our shares. Our issued share capital consists of a single class of shares which carry no right to fixed income. Each ordinary share of the Company carries one vote at our general meetings.
Serco’s ‘free float’, representing the portion of shares that can be publicly traded without restriction, is 100%. Our share capital at 31 December 2018 was 1,098,564,237 ordinary shares and the closing price on the LSE at that date was 95.6p, representing a market capitalisation or equity value of the Company of £1,050m.
Serco’s ownership profile is heavily weighted in value terms to institutional shareholders. Private shareholders holding in their own name on the share register represent only around 1% of the company ownership, with private brokers and wealth managers representing a further 5%. Our mix of 94% institutional and 6% private shareholders is typical of the wider stock market. Our joint stockbroker, JP Morgan Cazenove, define institutional investors as investment firms with a mandate to manage unitised retail funds, investment trusts, corporate retirement funds and hedge funds.
Our ownership concentration is further demonstrated in Figure 1, with around 85% of the shares held by the 20 largest institutional shareholders. This is more concentrated than typical for the FTSE 250, which would be around 75%. This is partly a reflection of Serco being a relatively smaller company, which tends to result in higher shareholder concentration. The greater concentration is driven at the very top of the register. For more information, please see our Directors' Report in the Serco Annual Report 2018 (specifically voting rights, page 136).
The geographic ownership of Serco is demonstrated in Figure 2, and is broadly similar to that for the FTSE 250 index though with Serco attracting a greater proportion of shareholders from the UK and Europe.
We recognise that meaningful engagement with our owners is integral to our continued success. We therefore seek long term relationships based on transparency, honesty and clarity. We are committed to open and regular engagement with our institutional and retail shareholders. For more information about how we achieve this, please see: Our owners: Transparency.
Honouring our relationship with Serco’s owners is a key responsibility and determinant of being successful and sustainable. We are determined to protect and maximise our shareholders’ interests, and do so through a focus on shareholder returns, how we manage risk and a commitment to transparency.