Serco Group (SRP) investor relations material

Executive summary

• Revenue grew 5% year-over-year at constant currency to £2.4bn, with 3% organic growth and 9% in North America, and a 6% margin at the upper end of guidance.

• Order intake reached £3.2bn, book-to-bill ratio above 130%, and pipeline at £11.9bn; order book up 9% to £14.5bn.

• MT&S acquisition completed, expanding defense capabilities and contributing to both organic and inorganic growth.

• Interim dividend increased by 8% to 1.45p per share and £50m share buyback announced, to be completed by year-end.

• Diversified global footprint and focus on digital, AI, and operational excellence support growth and competitiveness.

Financial highlights

• Revenue up 5% at constant currency (3% organic, 2% acquisitions); defense sector revenue up 11% organically.

• Underlying operating profit reached £146m (up 2%), margin steady at 6.0%.

• Underlying EPS increased 12% to 9.60p; interim dividend up 8% to 1.45p.

• Free cash flow improved 21% to £91m; trading cash conversion at 84%.

• Return on invested capital at 24%, leverage at 0.9x EBITDA, below the 1–2x target range.

Outlook and guidance

• Full-year revenue expected at ~£4.9bn, with organic growth ~1% and acquisitions contributing ~3%.

• Underlying operating profit guided to ~£260m, broadly flat year-over-year; margin expected at 5.3%.

• Free cash flow expected at ~£130m; cash conversion to remain at or above 80%.

• Adjusted net debt projected to rise to ~£285m by year-end due to MT&S acquisition and buyback.

• Tax rate guidance at 23–25% for the medium term.