Security services group Serco (LON:SRP) said it expected a rise in underlying profit for the full year, despite “less than ideal” market conditions.
Underlying trading profit for the first half is expected to rise by about 20 percent on-year, and for the full year rise to £80 million, up from £69.3 million a year earlier.
Revenue is forecast to fall, however, down by £2.95 billion to hit £2.7 – £2.8 billion. The results for the first half of 2018 would include adverse currency impacts of around £60 million for revenue and £3-4 million for trading profit.
“As expected, the revenue reduction is driven largely by contracts that ended in 2017, whereas the profit increase is driven by transformation savings,” Serco said.
“We therefore do not anticipate any material change to analyst consensus for underlying trading profit for 2018, although, as we have previously stated, there remains a wide range of potential outcomes reflecting the sensitivity of our profits to even small changes in revenues and costs, as well as further movements in currency during the second half of the financial year.”
Serco said order intake continued to be ‘strong’ and reach over £1.5 billion in the first half, with the group expected to take responsibility for facilities management services at six major NHS hospital sites previously contracted to failed company Carillion.
