Serco Group (SRP) H1 2025 earnings summary

Executive summary

• Revenue reached £2.4 billion, up 5% at constant currency, with 3% organic growth and 9% in North America.

• Underlying operating profit was £146 million, up 2%, with a 6% margin at the top end of guidance.

• Order intake was £3.2 billion, book-to-bill ratio over 130%, and pipeline at £11.9 billion.

• Defense now represents over 40% of group revenue and over 80% of HY25 order intake, with significant growth and pipeline expansion.

• MT&S acquisition completed, enhancing defense capabilities; £50 million share buyback and interim dividend up 8% to 1.45p per share announced.

Financial highlights

• Revenue: £2,419m (up 3% year-over-year); organic growth 3%, acquisitions 2%, FX impact -2%.

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

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

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

• Underlying ROIC at 24.0%, reflecting a capital-light model.

Outlook and guidance

• Full-year 2025 revenue expected around £4.9 billion, organic growth ~1%, acquisitions ~3%.

• Underlying operating profit guided at ~£260 million, broadly flat year-over-year.

• Free cash flow expected at ~£130m; cash flow conversion at 80%+ of profit.

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

• Guidance unchanged for revenue, profit, and cash flow; tax rate expected to be slightly better.