Serco expects profits rise in 2018 and 2019
Serco Group saw both profits and revenue fall in 2017 but expects earnings to rise both this year and in 2019.
Revenue was down two per cent from £3 billion in 2016 to £2.95bn with operating profit slipping from £42.2 million to £30m for the public services group which operates waste services in Sandwell and runs leisure centres in Shropshire.
Group chief executive Rupert Soames said: "With profits at the top end of the expectations we set out some 15 months ago, net debt lower than we expected, fully funded pension schemes, and strong order intake, we delivered a solid performance in 2017 in a difficult market. Most importantly, we expect profits to grow in both 2018 and 2019.
"We understand that getting to this point has been a long haul for investors, and that there is still a long, and probably bumpy, road ahead before we are producing acceptable returns. But we are now moving forward, not backward.
"The benefits of our international footprint have never been more evident as the UK market for public service outsourcing is afflicted by well-publicised traumas. This environment may produce opportunities for suppliers with strong track records of delivery, and Serco also has the advantage of choice as to where we allocate resources and effort between different markets. Therefore, as well as ensuring that we support our UK customers, and respond appropriately to opportunities as they arise, we will also be investing in our businesses in North America, Europe, the Middle East and Asia Pacific."
Order intake was up 36 per cent at £3.4bn including the Grafton prison in Australia which is the group's largest ever contract win, and over 30 other contract awards worth more than £10m each across the UK, Europe, America and the Middle East.
Serco has signed a revised agreement with the special managers and provisional liquidators of Carillion to buy a portfolio of selected UK health facilities management contracts.
