Serco’s growth pushes shares higher

International services provider Serco (LON:SRP) has said that it expects underlying trading profits for the first half of 2019 to be more than 20% above those for the previous year. Revenues will be towards the upper end of prior guidance after the company won its largest ever contract during the period.

CEO Rupert Soames said: “Following a strong 2018, which marked an inflection point for Serco after several years of decline, we expect to report another good performance in the first half of 2019. The revenue growth seen in the second half of 2018 has continued, and profits and margins are both well up on the first half of last year. Order intake in the first half of this year has been very strong at over £3bn, already exceeding our revenue forecast for the whole of 2019. The strategic advantage of having a strong international footprint shows clearly in these results, with strong revenue growth in North America and AsPac; I am also delighted to see improvement in the trading performance of our UK division, which is showing the benefit of the Carillion health facilities management acquisition completed in 2018.

“The NSBU acquisition announced last month adds materially to the scale and capability of our US defence business, and we look forward to closing the transaction in the second half and to the earnings accretion it will deliver in 2020“.

Serco’s share price rose by 3.98% to 141.20p (as of 13:55 BST).