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2010 Full Year Results

Date: 02 Mar 2011

Strong performance, portfolio of growth opportunities ahead

Key Data - 2010 Full Year results

12 months to 31 December

% change
up 9.0%
Adjusted operating profit
up 12.6%
Operating profit 
up 13.8%
Profit before tax
up 20.8%
Adjusted earnings per share
up 17.5%
Earnings per share
up 19.1%
Dividend per share
up 17.6%
Group free cash flow
up 35.3%

£5.6bn of contract awards spread internationally

  • Service quality supports high win rates. Continue to win one in two new bids and 90% of rebids
  • During 2010, signed £4.2bn of contracts, and appointed preferred bidder for £1.4bn of contracts
  • 40% of revenue generated outside the UK, with strong growth in the Americas and AMEAA

Strong financial performance

  • Revenue growth of 9.0% (7.6% excluding currency)
  • Adjusted operating profit margin increase of 19bps to 6.0%  (16bps excluding currency)
  • Group free cash flow exceptionally strong at £185.8m (2009: £137.3m)
  • Total dividend up 17.6% to 7.35p reflecting growth in earnings

Substantial global demand for efficient delivery of essential front-line services

  • Economic environment and reform of public services create opportunities in new and existing markets
  • Customers seeking help to build, protect and improve front-line services and increase efficiency
  • Headwinds in UK during 2011 as Government austerity measures and reforms are shaped
  • Exposure to different economies through portfolio provides resilience and overall growth potential

Reiterating guidance based on high revenue visibility and substantial pipeline of opportunities

  • Order book of £16.6bn at 31 December 2010 (£17.1bn at 31 December 2009); visibility of 92% of planned revenue for 2011, 77% for 2012 and 66% for 2013
  • Substantial £29bn pipeline of identified opportunities
  • In 2011, expect good organic revenue growth and progress towards our 2012 margin guidance and continue to expect an increase in revenue to approximately £5bn and in Adjusted operating profit margin to approximately 6.3% by the end of 2012*

*excluding material acquisitions, disposals and currency effects, based on 2008 exchange rates

Christopher Hyman, Chief Executive of Serco Group plc, said:  "Our colleagues across the world deliver essential services and their achievements have led to a strong financial performance in very challenging times.  We expect Serco's position in new, diverse and expanding international markets to deliver ongoing benefits. Our agility and capacity to innovate underpins our confidence in continued growth across all our regions."


Adjusted operating profit and Adjusted earnings per share shown above are before amortisation of acquired intangibles, as shown on the face of the Group's consolidated income statement and the accompanying notes.

Group free cash flow is free cash flow from subsidiaries and dividends received from joint ventures, and is reconciled in Section 3 of the Finance Review.

Performance excluding currency has been calculated by translating non-Sterling revenue and earnings for the year to 31 December 2010 into Sterling at the average exchange rates for those currencies in 2009.

The order book is the value of future revenues based on all existing signed contracts. It excludes contracts at the preferred bidder stage and excludes Indefinite Delivery, Indefinite Quantity (IDIQ) contract vehicles where we are one of a number of companies able to bid for specific task orders within the IDIQ.

The pipeline is the estimated value of all future potential opportunities that are clearly defined and identifiable.

For further information please contact Serco:
Jill Sherratt, Interim Head of Investor Relations T +44 (0) 20 8334 4122
Dominic Cheetham, Director of Corporate Communications T +44 (0) 20 8334 4334
Marcus DeVille, Head of Media Relations T +44 (0) 20 8334 4388

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Last Updated: 02 Mar 2011