Serco profit hit by reshuffle and slow US markets

The UK firm, which runs services from London’s light rail to prisons and air traffic control centres around the world, on Wednesday reported an adjusted pretax profit of £102.1 million for the six months to the end of June, in line with analyst forecasts.

Serco said it had won £4.2 billion worth of work in the period, compared with £2.5 billion a year ago, and had increased its order book - the value of future revenues based on all existing signed contracts - to £19.4 billion.

British and US markets have been hit by budgetary delays with austerity measures in the UK slowing the flow of public sector work and a presidential election impacting on US spending plans.

Revenue rose 4.3 per cent to £2.34 billion, underpinned by last year’s acquisitions and good growth in Australasia and the Middle East, it said.

Sales in the US slipped 16 per cent, while in its core UK market, where it said conditions were improving, revenue dropped 1 per cent.

Reorganisation costs included the creation of a global business process outsourcing division, where Serco is targeting more back and middle office outsourcing work and avenues into private sector markets.