Outsourcer Serco hails strong momentum after rise in new orders
Serco said new business will help offset the impact of losing immigration contracts in the UK and Australia.
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Your support makes all the difference.Government outsourcer Serco said it has seen strong momentum over the second half of 2024 on the back of rising orders.
It indicated that its strongest pipeline of new business for “more than a decade” will help offset the impact of losing immigration contracts in the UK and Australia.
Mark Irwin, group chief executive of Serco, said the group has a “positive” outlook for 2025, as growth in North America looks set to mitigate increased costs in the UK following rises in national insurance contributions and the minimum wage.
Overall, we are confident in the group’s outlook
It said revenues next year will be “in line” with 2024 as it predicts a boost from US defence contracts.
Nevertheless, it is due to see a 7% revenue fall linked to immigration contracts in the UK and Australia.
It came as Serco reported that revenues are set to be around £4.8 billion for 2024, with organic revenues down around 3% for the year.
The company also revealed that underlying profits are set to be 9% higher for the year at around £270 million following the strong second half. This is likely to dip slightly to £260 million next year.
Mr Irwin said: “We are proud of the progress throughout 2024, reporting a strong financial performance and delivering important services to our customers in a dynamic global environment.
“We built stronger trading momentum in the second half of the year, particularly in our North America business, and delivered good margin gains through our relentless focus on performance improvement and disciplined execution.
“Overall, we are confident in the group’s outlook, built on the innovation, expertise and efficiency we bring to our partnership with governments.”
Shares in the company rose by 7.3% in morning trading on Thursday.