Serco on track for 2012 as UK improves

OUTSOURCING firm Serco said almost £4bn of contract wins in the first half of the year and an improving outlook in the UK left it confident of meeting 2012 targets.

The group said today it expected first half revenue growth to be around 6 per cent, almost entirely from last year’s acquisitions, with good second half organic growth helping to boost a strong earnings performance for 2012.

Serco has won a number of British deals in 2012 such as training services for the Royal Air Force and Navy, and back office and community health services in the NHS, leading the group to a more upbeat outlook on a UK market that has suffered from budgetary delays and austerity measures

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Further contracts to run prisons, local authority and health related services are expected to come to market this year.

The FTSE 100 firm, which runs services from London’s light rail to prisons and air traffic control centres around the world, said US federal market conditions had not improved leaving a tough outlook for its Americas division.

“The start of the year has been pleasing,” Serco chief executive Christopher Hyman said in a statement. “For the year as a whole we anticipate that further strong growth in Africa, the Middle East, Asia and Australisia (AMEAA), the improving UK outlook, and the delivery of cost efficiencies will see us meet expectations.”

According to a Reuters poll, analyst consensus for 2012 pre-tax profit is £275.84m.

In February Serco said it had identified £30bn of opportunities across the group, with over a quarter coming from its AMEAA region where the firm is targeting expansion.