Serco Group (SRP) H2 2025 earnings summary

Executive summary

• Delivered strong full-year 2025 results with revenue of GBP 4.9 billion, underlying operating profit of GBP 272 million, and robust operational delivery across defense, justice and immigration, and citizen services.

• Strategic focus sharpened on high-growth sectors and geographies, with defense now accounting for 40% of total revenue.

• Maintained high contract retention rates and strong new business win rates, supporting a record pipeline of GBP 12.1 billion.

• Leadership transition announced, with Mark Reid succeeding Nigel Crossley as Group CFO.

Financial highlights

• Revenue reached GBP 4.9 billion, up 3% at constant currency year-over-year; underlying operating profit was GBP 272 million, with a margin of 5.6%.

• Underlying EPS (diluted) rose 2% to 16.93p; dividend per share increased 8% to 4.50p.

• Cash conversion remained exceptional at 112%, with free cash flow of GBP 219 million.

• Adjusted net debt increased to GBP 206 million, reflecting the MT&S acquisition and capital returns; net debt to EBITDA at 0.7x.

• Order intake was GBP 5.5 billion, with a book-to-bill ratio of 114%.

Outlook and guidance

• 2026 revenue expected around GBP 5 billion, with 3% organic growth.

• Underlying operating profit guidance for 2026 is GBP 300 million, over 10% higher year-over-year, with margin expected at 6%.

• Free cash flow forecast at GBP 160 million; adjusted net debt to finish 2026 at GBP 165 million.

• Full-year dividend recommended at 4.5p per share, up 8%.