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Serco sees first-half profit rising about 50%; reinstates annual guidance

By BFN News | 07:25 AM | Wednesday 17 June, 2020

Outsourced services provider Serco said it expected to post a rise in first-half underlying trading profit of about 50%, having experienced limited impacts from the Covid-19 crisis. Underlying trading profit for the six months through March was seen coming in at £75m-£80m, on the back of 23% growth in revenue, the company said in a trading update. Serco said it faced significant operational challenges as a result of Covid-19, but limited financial impact in the first half, as losses in some parts of the business were largely offset by work to help customers elsewhere. Reinstating its guidance for the full year, Serco upgraded its annual revenue expectation to around £3.7bn, up from previously guidance of £3.4bn-to-£3.5bn. Underlying trading profit was expected at £135m-to-£150m, compared to previous guidance of around £145m. Chief executive Rupert Soames said the company's first-half performance was 'very strong'. Much of its growth in profits was coming businesses outside of the UK and results from contracts won in 2019, as well as the acquisition of the Naval Systems Business Unit of Alion for $225m in August 2019. Covid-19 had put strain on the company's leisure and transport businesses, but this had so far been largely offset by additional work in citizens services. 'Order intake in the first half has been strong, and we expect to achieve a book-to-bill ratio of around 100%,' Soames said. 'Liquidity is strong, and we expect leverage to be near the bottom end of our target range.' Story provided by

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