Interim Management Statement
Serco Group plc - Interim Management Statement
Continued strong performance: year-to-date contract awards reach £4.5bn
12 November 2009
Serco Group plc (Serco), the international service company, today issues its
Interim Management Statement covering the Group's performance since 30 June
2009.
Serco has continued to perform strongly in the second half and remains on track
to deliver on its financial guidance for 2009. We have been awarded a further £
1bn of contracts so far in the second half, bringing the total for the year to
date to £4.5bn, comprising signed contracts valued at £3.4bn and preferred
bidder appointments valued at £1.1bn.
In the US, we have signed contracts valued in total at around US$700m, and
continue to make excellent progress with the SI integration. Wins in the US
included the renewal of our contract with the US Department of Homeland
Security's US Citizenship and Immigration Services to provide records
processing support at its National Benefits Center, which is valued at up to
US$190m.
In new UK markets, our pathology partnership with the Guy's and St Thomas' NHS
Trust, GSTS Pathology, was appointed preferred bidder for a 10 year contract,
valued at around £30m to Serco, with Bedford Hospitals NHS Trust to operate its
pathology services. In another new market, we signed a contract with Transport
for London valued at £140m to design, build and operate the new London Cycle
Hire Scheme.
In existing UK markets, we signed new contracts with the London Borough of
Bexley valued at up to £160m over its full fifteen-and-a-half year term to
deliver a full range of environmental services, and with Peterborough City
Council valued at £44m over 11 years to transform its information,
communications and technology services. We have also been appointed preferred
bidder by the South East England Development Agency to provide business link
services in the South East, in a contract valued at around £80m over three
years, with the opportunity to extend for a further two years.
Smaller and medium-sized contract wins continue to play an important role in
our growth. Further detail on some of the substantial number of wins in this
half, including those mentioned in this statement, is published in a Contract
News Update today on www.serco.com.
We have also successfully started a number of major new contracts in this half
including, in the UK, our three contracts under the Government's Flexible New
Deal initiative to help long-term unemployed people back into work; in
Australia, our contract with the Australian Government Department of
Immigration and Citizenship (DIAC) to transform its immigration detention
centres; and in Dubai, our contract to operate the new Metro system.
Our financial position remains strong and we anticipate good free cash flow
generation for the year.
In the current global economic climate, our customers continue to face
significant challenges in increasing the efficiency of essential services.
These are driving further potential opportunities for us in both existing and
new markets. This, together with our substantial order book which gives us
excellent visibility over our revenues, and our strong capabilities and
operational track record, supports our expectation of achieving our financial
guidance for 2009 and beyond.
Christopher Hyman, Chief Executive of Serco Group plc, said: "We have continued
to make strong progress through the second half of the year. Governments and
large commercial organisations around the world continue to face challenges in
delivering better services and improving productivity, and with our breadth and
depth of skills, we are well placed to help them meet those challenges. The
success we have enjoyed so far this year is testament to that and I remain
positive on our prospects for the future."
Ends
For further information please contact Serco:
Charles King, Head of Investor Relations T +44 (0) 208 334 4122
Dominic Cheetham, Director of Corporate Communications T +44 (0) 208 334 4334
Marcus De Ville, Head of Media Relations T +44 (0) 208 334 4388
About Serco
Serco is a FTSE 100 international service company, which combines commercial
know-how with a deep public service ethos.
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, transport, welfare to work and the commercial sectors.
More information can be found at www.serco.com
Financial Guidance
Our projections are that our revenue will increase to approximately £5bn and
our Adjusted operating profit margin to approximately 6.3% by the end of 2012,
excluding material acquisitions, disposals and currency effects.
In 2009, we expect to deliver double-digit revenue growth and a 30bps increase
in our Adjusted PBT margin, excluding SI International. The addition of SI
International is anticipated to increase our 2009 revenue growth by
approximately 10%. Including the benefit of SI International, we expect our
Adjusted operating profit margin of 5.3% in 2008 to increase by approximately
40bps in 2009. This 2009 guidance excludes material currency effects.