Serco revenues dip in line with guidance, underlying operating profit up 10%
Outsourcer Serco posted a dip in full-year revenue on Thursday, in line with its guidance, and a 10% jump in underlying operating profit.
In the year to the end of December 2024, reported revenue nudged down 2% to £4.8bn, while underlying operating profit rose to £274m from £249m.
Reported operating profit was 52% lower at £130m due to an exceptional £115m non-cash goodwill impairment charge in Asia Pacific.
The underlying operating margin improved 60 basis points to 5.7% with progress in all regions, Serco said, "reflecting ongoing focus on efficiency and productivity".
The order intake rose 7% to £4.9bn and Serco hailed "very strong" free cash flow of £228m, ahead of guidance of about £170m.
As far as the outlook for 2025 is concerned, Serco said it expects revenue to be similar to 2024, with underlying organic growth of 7% offsetting reductions in the UK and Australian immigration contracts.
Chief executive Mark Irwin said: "Our 2024 results reflect another year of strong operational and financial delivery across the group.
"We accelerated trading momentum through the second half of the year, which allowed us to achieve full year revenue in line with guidance, underlying operating profit up 10%, a 60 basis point increase in margins and deliver significantly more free cash flow than initially expected. We had excellent order intake of £4.9bn resulting in a robust £13bn order book, and we ended the year with a strong pipeline of qualified new business opportunities exceeding £11bn to underpin future growth."