Serco 'on track for growth this year'

Support services group Serco said it was on track for strong revenue growth in 2010, predicting its future performance would benefit from client demand for efficiency amid a state spending squeeze.

"We remain on track to deliver our financial guidance for 2010, which is for continued strong organic revenue growth and further progress this year towards our 2012 margin guidance," Serco said in a trading update yesterday.

Securing big contracts to maintain and operate Dubai's metro, running immigration detention centres in Australia and schemes to help unemployed Britons get back into work, have helped to underpin the company's performance.

Hide Ad
Hide Ad

Some analysts said Serco's upbeat statement was unsurprising and offered little further incentive to buy its stock.

Andy Brown, analyst at Panmure Gordon, said: "Serco remains a quality operator but with a full valuation and after strong performance, our stock preference remains elsewhere."

Substantial cuts in spending planned by the coalition Government could sting companies but some, such as Mouchel and Mitie have said the squeeze could work in their favour as government offices opt for more outsourcing to drive down costs.

Serco also sees itself benefitting from Westminster's spending squeeze.

It said opportunities to improve productivity and achieve significant efficiencies for customers "continue to give us confidence in our prospects for the future."

Related topics: