Serco profits rise as Asia drives growth
OUTSOURCING firm Serco will target further expansion in fast-growing markets in Australasia and the Middle East in 2012, after the regions helped it ride out tougher times in its core UK and US markets.
FTSE 100-listed Serco, which runs services from the Docklands Light Railway to prisons and air traffic control centres around the world, posted adjusted pre-tax profit of £262.2m for 2011, ahead of an average forecast of £259.6m by eight analysts.
Revenues rose 7.4 per cent to £4.64bn, helped in part by organic growth of 37 per cent across Africa, the Middle East, Asia and Australia, where it won a number of deals in the defence, transport and health sectors.
“For us this has probably been our toughest year in our traditional markets of the UK, which was flat, and the US, which declined, in a first for us. The story for us has really been about the growth in the developing economies,” Serco chief executive Christopher Hyman said.
Serco said its order book, which is the value of future revenues based on signed contracts, stood at almost £18bn at the end of the year, giving revenue visibility of 92 per cent for 2012, 80 per cent for 2013 and 70 per cent for 2014.
Serco has begun 2012 with UK defence contract wins worth over £210m, including a deal to provide training and support to the army prior to deployment on operations.
Serco, which employs over 100,000 people in 30 countries, raised its full-year dividend by 14.3 per cent to 8.4p.
Rival outsourcer Capita, which pipped Serco to a £500m deal to run Britain’s army recruitment programme, posted a six per cent rise in 2011 profit last week, underpinned by growth from acquisitions.