Serco Group (SRP) Trading Update summary

Financial performance and outlook

• First-half 2025 revenue expected at ~£2.4bn, up 2% year-on-year, with organic growth of 2%.

• Underlying operating profit for H1 anticipated at least £140m, maintaining a strong margin of 5.9%.

• Full-year revenue guidance raised to ~£4.9bn, with organic growth now expected at ~1%.

• Full-year underlying operating profit guidance remains at ~£260m, with margin expected at 5.3%.

• Free cash flow for the year targeted at ~£130m, with cash conversion in line with at least 80% of profit.

Contract wins, acquisitions, and regional trends

• Secured ~£3bn in new contract awards, with a strong focus on the defence sector.

• Completed the MT&S acquisition, enhancing US and international defence market presence.

• North America expected to deliver the strongest organic growth in H1, driven by defence contracts.

• UK growth supported by new business wins in citizen services and justice; Asia Pacific and Middle East see lower revenue due to contract ramp-downs.

• MT&S acquisition to contribute ~£130m in revenue and ~£7m in operating profit for 2025.

Financial position and capital management

• Adjusted net debt projected at ~£325m at June-end, reducing to ~£245m by year-end.

• Leverage expected at 1.2x net debt to EBITDA at mid-year.

• Board to review capital position at the half-year.

• Currency translation expected to have a £7m adverse impact on profit for the year.

• Free cash flow generation remains weighted to the second half.