AGM Statement
Friday 3 May 2002
Friday 3 May 2002
See below
Serco Group
2002 AGM Statement
Serco Group plc ('Serco'), the international management services company, held
its Annual General Meeting today. At the meeting Richard White, Executive
Chairman of Serco, made the following comments on current trading:
Results for 2001
'Results for the year ended 31st December 2001 saw Serco once again maintain
excellent growth in sales and profits, exceeding the results targeted at the
start of the year. We also announced with our results our intention to raise £
120 million of new equity, which we have successfully completed.
This AGM statement is the first announcement supporting our plans to issue
regular trading updates.
Current trading
We remain a highly predictable business. At the beginning of this year we had
already secured 82% of our estimated turnover for 2002 and this has increased
to 88% as at 31st March 2002. Our order book remains at over £6 billion,
equivalent to more than five years 2001 turnover, and organic growth across our
businesses remains strong. We are continuing to see a flow of new bids and also
opportunities to broaden the scope and range of current contracts.
In the year to date we have submitted a record level of bids valued in total to
Serco at over £4 billion. This includes a number of major defence contracts in
both the UK and internationally: Airfield Support Services Project, Army
Training Estate, Northwood and Prime, all in the UK; Panzertruppenschule in
Germany, a contract to provide fleet management and maintenance of military and
civil vehicles at the Armoured Training Centre in Munster; and DIDS (Defence
Integrated Distribution System) in Australia, a contract to undertake
warehousing, distribution and maintenance of Defence supplies and equipment.
During the period we have won a range of new business across our operating
sectors worth over £200 million. As in the past we have also renewed over 90%
of contracts reaching their expiry date.
In addition to this we announced in February that we had been selected, as part
of Paradigm Secure Communications, as preferred bidder for Skynet 5. As part of
the contract Serco will provide network and facilities management services,
including spacecraft and network operations, network maintenance, training,
supply management and through-life buildings and facilities maintenance. The
contract is worth a further £220 million to Serco over 15 years.
We continue to be well positioned in a number of growing overseas markets. This
week we announced the formation of Serco Gulf, a joint venture facilities
management company, with the Jebel Ali Free Zone Authority. Serco Gulf will
deliver engineering and other support services to the Dubai Ports Customs and
Free Zone Corporation at Jebel Ali, Port Rashid and other locations in Dubai
under a 10 year contract term, with total sales revenue to Serco expected to be
over £40 million. This is one of the first significant multi-activity
outsourcing contracts that has been awarded in the Middle East and will provide
us with an opportunity to support other government departments in what is a
progressive and expanding marketplace.
Bid cost accounting policy
There has been much comment on bid cost accounting recently. As previously
stated our policy is to expense bid costs until we are confident of being
awarded a contract, usually at preferred bidder status. If the draft UITF 51
was applied to our position at 31st December 2001, of capitalised bid costs on
bids yet to reach financial close of £3 million, approximately £1 million would
need to be expensed. As a consequence, the application of UITF 51, if issued in
its current form, would not have a material impact on the Group for 2002 or
going forward.
Outlook
We are on course to continue our successful track record of growth in 2002.
Additionally our markets are expanding both in the UK and internationally. We
remain confident of achieving strong long-term growth.'
- Ends -
For further information please contact Serco Group plc: T: +44 (0) 1932 755900
Kevin Beeston - Chief Executive
Ben Woodford - Corporate Communications Director
Serco Group, Inc.
20 E Clementon Road, Suite 102 South
Gibbsboro, New Jersey 08026
United States
T +1 856 346 8800
F +1 856 346 8463
www.serco.com
Serco Group Pty Limited
Level 10, 90 Arthur Street
North Sydney, NSW 2060
Australia
T +61 (0)2 9964 9733
F +61 (0)2 9964 9924
Serco Group plc
Dolphin House, Windmill Road
Sunbury-on-Thames, Middlesex TW18 7HT
United Kingdom
T +44 (0)1932 755900
F +44 (0)1932 755 854
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