Serco shares nudge higher after raising profit guidance
Serco shares jumped this morning after the outsourcing giant lifted its annual profit forecast.
The FTSE 250 firm, which manages government contracts in areas such as immigration services, said trading for the first six months of 2024 was in line with expectations, with revenue forecast to come in at around £2.4bn for the period.
It added that underlying operating profit was also “ahead of plan” at approximately £140m, and announced that it has upgraded its underlying operating profit guidance for 2024 by four per cent to £270m – nine per cent higher than 2023.
Free cash flow is also expected to improve, rising to £150m, the firm added.
Chief executive Mark Irwin said: “We have delivered a good performance in the first half, with progress in improving productivity and the underlying performance of our portfolio allowing us to increase our profit guidance for the full year.
“As we enter the second six months of the year, while mindful of a potential impact internationally from elections in 2024, we remain optimistic about the quality of our pipeline of potential new work to support our medium-term growth targets.”
Markets responded positively to the update, with the group’s share price rising over six per cent this morning.
Serco is set to deliver its half-year results on August 1.
The positive trading update comes after the company settled a lawsuit with a group of institutional investors last week linked to a historic overcharging scandal.