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Serco first-half results on track, pipeline gives room for optimism

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Serco first-half results on track, pipeline gives room for optimism

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EDINBURGH (Reuters) – British outsourcing group Serco <SRP.L> said a better-than-expected outlook for its bid pipeline kept it on track to meet profit and revenue guidance this year despite several of its markets turning markedly more unpredictable. Serco, which runs transport, health, justice, defence and security services for public departments and gets half of its revenues from the UK, reported flat first half revenue of 1.5 billion pounds ($2.0 billion), with the weakness of the pound helping to offset the decline. “The most striking element is the order intake, which for two successive periods has been very strong, totalling some 4 billion pounds in the last twelve months, and we have succeeded in maintaining the pipeline at broadly similar levels despite strong order conversion,” CEO Rupert Soames said in a statement. “However, as we said in June, we remain sensibly cautious in the light of the political environment in several of our markets becoming markedly more unpredictable”. Underlying trading profit fell 30 percent, after a series of one-offs in the same period last year, to 35 million pounds. the group is in the middle of an overhaul started three years ago after a reset of strategy followed a series of profit warnings.

(Reporting by Elisabeth O’Leary; editing by Kate Holton)
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