Interim Management Statement

Serco Group plc - Interim Management Statement

Further £1.9bn of contract awards in second half to date; portfolio delivers
good performance despite headwinds; strong future growth opportunities remain 
across the Group

17 November 2011

Serco Group plc (Serco), the international service company, today issues its
Interim Management Statement covering the Group's performance since 30 June
2011. The Group has continued to deliver a good operational and financial
performance, despite ongoing headwinds in the UK and US. The outcome for the
2011 financial year is anticipated to be in line with expectations. The outlook
and our guidance remain unchanged from those set out with the half-year results
announced on 24 August 2011.

Christopher Hyman, Chief Executive of Serco Group plc, said: "For 2011, we will
have achieved good organic growth despite some challenging conditions, with the
outcome for the year anticipated to meet expectations. While short-term
headwinds remain, particularly those facing the US federal contracting
industry, longer term developments in our markets and our strong positions are
all encouraging factors. This underpins our confidence that the portfolio will
sustain growth well into the future."

Contract awards

At the half year, Serco had a £16.7bn order book and a substantial £29bn
pipeline of identified opportunities around the world. Since then, we have been
awarded £1.9bn of contracts, bringing the total for the year to date to £4.4bn,
comprising signed contracts valued at £4.2bn and preferred bidder appointments
valued at £0.2bn. Winning or expanding smaller contracts plays an important
role in our growth and a selection of these is published today in a Contract
News Update on www.serco.com. Notable contract awards so far in the second half
of the year are highlighted below.

In the UK, new contracts within our Civil Government division include the
Barclays Cycle Hire Scheme being expanded in East and West London at an
additional total contract value of £50m through to August 2015, and the signing
of a five-year £32m renewed contract for out-of-hours care in Cornwall and the
Isles of Scilly. In Defence, as strategic partner to the Defence Science and
Technology Laboratory (Dstl), we will oversee and deliver part of Dstl's
relocation programme worth approximately £100m to Serco over the next five
years. Significant wins for local authorities include preferred bidder for
Peterborough's strategic partnership for front-line and back office support
services with an initial contract value of £100m over 10 years, and the
eight-year £44m new contract for refuse and recycling services for Wandsworth
Borough Council.

In the Americas, task orders and contract awards have continued to be won in
the second half, amounting to a total award value of over £200m. However, as
previously indicated, revenues in the second half of this year will be lower
than the very strong performance seen in 2010, as economic challenges and the
Federal Government's budgetary negotiations continue to cause short-term
disruption to the industry.

In AMEAA, Serco signed in July a services contract for Fiona Stanley Hospital
near Perth, which has a total value to Serco of A$1.3bn (approximately £850m)
over ten years. A new A$100m five-year contract to operate the South Queensland
Correctional Centre was signed, replacing and extending an equivalent contract
for the Borallon facility which is being decommissioned. A number of previous
wins have also become fully operational in the second half of the year,
including: Mount Eden Correctional Facility in New Zealand; Court Security and
Custodial Services in Western Australia; logistics and base support services
for the Australian Defence Force (ADF) in the Middle East; the opening of the
Green Line expansion to the Dubai Metro; and the full transfer of air traffic
control services for lower airspace in Iraq.

Acquisitions

As announced in the first half of the year, Serco has acquired Intelenet, a
leading provider of Business Process Outsourcing (BPO) services to the private
sector around the world and in the domestic Indian market, for up to £386m. The
transaction completed after the half-year balance sheet date, with £285.7m of
cash consideration and £50.8m of acquired net debt being accounted for from
July 2011. There remain contingent deferred consideration cash payments of up
to £49.8m through to December 2013. The integration of Intelenet is proceeding
well.

Serco has made two small acquisitions during the second half of the year to
date. The combined total consideration is up to £20m, and the combined total
annual revenue is approximately £35m. Further enhancing our BPO capabilities
around the world, in Australia Serco has acquired Excelior Pty Ltd, adding
significant on-shore contact centre capability to support growth in both the
public and private sector markets. In the growing market for public sector debt
management, Serco has acquired Philips Collection Services Ltd, the UK's
largest independent revenue recovery company.

Financial position

Aside from the Intelenet acquisition, no other material events, transactions or
impacts on the Group's strong financial position have taken place since the 30
June 2011 balance sheet date.

Our strong financial position is supported by good free cash flow. Serco has
also continued to develop both greater diversification and a lengthened
maturity profile of its borrowing facilities. This has included the successful
completion in October 2011 of a further $335m US private placement issue, the
proceeds of which have been applied to the repayment of existing debt and for
general corporate purposes.

Outlook and guidance

The outlook and our guidance remain unchanged from those set out with the
half-year results announced on 24 August 2011. The outcome for the 2011
financial year is anticipated to be in line with expectations, including good
organic revenue growth and further progress on operating margin. Assuming the
impact of ongoing economic challenges is manageable, our guidance remains that
by the end of 2012 we expect increases in revenue to approximately £5bn and in
Adjusted operating profit margin to approximately 6.3% (excluding material
acquisitions, disposals and currency effects). Strong longer term growth
opportunities remain across the Group.

Ends

For further information please contact Serco:

Stuart Ford, Head of Investor Relations T [phone]

Dominic Cheetham, Director of Corporate Communications T [phone]

Marcus De Ville, Head of Media Relations T [phone]

About Serco

Serco is a FTSE 100 international service company, which combines commercial
know-how with a deep public service ethos.

Around the world, we improve essential services by managing people, processes,
technology and assets more effectively. We advise policy makers, design
innovative solutions, integrate systems and - most of all - deliver to the
public.

Serco supports governments, agencies and companies who seek a trusted partner
with a solid track record of providing assured service excellence. Our people
offer operational, management and consulting expertise in the aviation, BPO,
defence, education, environmental services, facilities management, health, home
affairs, information and communications technology, knowledge services, local
government, science and nuclear, transport, welfare to work and the commercial
sectors.

More information can be found at www.serco.com