Serco Group (SRP) Trading Update summary

Financial performance and guidance

• 2025 revenue expected at approximately £4.9bn, up 3% at constant currency, with 1% organic growth and underlying operating profit around £270m, exceeding prior guidance.

• Free cash flow guidance for 2025 increased to £170m, with leverage at about 0.9x net debt to EBITDA.

• 2026 revenue projected at around £5.0bn, with improved organic growth of 3% and underlying operating profit guidance of £300m, targeting a 6% margin.

• Adjusted net debt expected to decrease to ~£150m by end of 2026, with trading cash conversion in line with the 80%+ medium-term target.

Operational and strategic highlights

• Order intake for 2025 is strong at about £5.5bn, with a book-to-bill ratio of at least 110%, and two-thirds of awards in defence, mainly in the UK and North America.

• Pipeline has reached a new decade high, driven by demand for critical front-line services in complex environments.

• Successful integration of MT&S, disposal of Hong Kong business, and mobilisation of Mubadala joint venture in the Middle East.

• Major contract wins include HMP Dovegate (UK), Canada's Future Aircrew Training Programme, and justice transport services in Victoria, Australia.

Operational excellence and leadership

• Achieved a 20% reduction in colleague safety incidents, fewer lost days, improved attrition, and maintained strong engagement and customer retention.

• New CEOs appointed for North America and UK & Europe, bringing international experience and a focus on growth.