Serco Group upgrades profit guidance, shares rise

Serco Group shares (LON: SRP) soared by 18% after strong Q3 trading across all regions worldwide.

The international provider of services to governments provided an unscheduled trading update, which shared an upgrade of guidance for 2020.

The group is currently running much of the UK government’s coronavirus test-and-trace and virus testing services.

Serco Group expects full-year revenue of around £3.9bn and an underlying trading profit of £160m-£165m.

“All of our regions worldwide are performing better than we expected and have increased their forecasts for 2020. In both Group and in the divisions, effective cost control and the ability of our systems to respond efficiently to increased demand has helped increase margins,” said the FTSE 250-listed group in its update.

In the UK, Serco Group has been awarded extensions to contracts to provide test sites and call handlers for NHS Test & Trace, “which is an indication of our customer’s satisfaction with the quality of work we have delivered.”

In Australia, restrictions on movement as a result of the pandemic has meant additional work for both the immigration services and the Citizens Services businesses. In the Middle East, there has been an increase in project-related work on rail and facilities management contracts for the group.

On the company’s outlook for 2021, the group said: “as we noted in our half year results, and as this unscheduled trading update underlines, the current crisis makes forecasting extremely difficult. We expect the uncertainties of 2020 will persist into 2021 as the world grapples with recurring outbreaks of infection.”

Serco Group shares (LON: SRP) are currently trading 18.16% at 139,90 (1211GMT). 



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Safiya Bashir
Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.