Strong financial performance; well placed to support customers around the world

Serco Group plc - 2010 Half Year Results

6 months to 30 June

2010

2009

% change
Revenue
£2,140.3m

£1,949.8m

up 9.8%
Adjusted operating profit
£124.4m

£110.0m

up 13.1%
Operating profit £115.6m £101.1m up 14.3%
Profit before tax
£101.4m

£83.4m

up 21.6%
Adjusted earnings per share
16.53p

14.02p

up 17.9%
Earnings per share
15.13p

12.62p

up 19.9%
Dividend per share
2.20p

1.85p

up 18.9%
Group free cash flow
£93.0m

£50.7m

up 83.4%


Strong financial performance

* Revenue growth of 9.8% (8.5% excluding currency)
* Adjusted operating profit margin increase of 17bps to 5.8% (16bps increase excluding currency)
* Group free cash flow increase of 83.4% to £93.0m; reflects a strong performance and a greater first half weighting of cash generation than in previous years
* Strong balance sheet and cash flow support planned £60m contribution to Group pension scheme

Substantial UK and international activity, winning and delivering quality, essential front line services

* Signed contracts in first half of £2.2bn, across a wide portfolio of geographies and markets
* Operational excellence supports continued high win rates of one in two new bids and 90% of rebids
* Order book of £16.7bn at 30 June 2010 (£17.1bn at 31 Dec 2009)

Supporting customers around the world in achieving savings and transforming services

* Continue to deliver strong growth, even as some markets change, through agile and innovative responses to our customers' needs
* Discussions ongoing with the UK Cabinet Office's Efficiency and Reform Group on cost savings
* Enhanced capabilities and breadth of portfolio in international businesses, which now account for nearly 40% of our revenues, showing substantial growth potential
* Well placed to benefit from developing opportunities given our strong customer relationships, our critical mass in UK and international markets, and track record of transforming services

Guidance supported by visibility and scale of opportunities

* Visibility of 98% of planned revenue for 2010, 84% for 2011 and 71% for 2012
* Substantial £28bn pipeline of specific, identified opportunities; shaping significant potential further opportunities across our international markets and in the UK
* In 2010, continue to expect strong organic revenue growth and further progress towards our 2012 margin guidance
* Continue to expect an increase in revenue to approximately £5bn and in Adjusted operating profit margin to approximately 6.3% by the end of 2012*

* excluding material acquisitions, disposals and currency effects, based on 2008 exchange rates p>

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News Source : 2010 Half Year Results