Serco share price rallies as it reaffirms profit and sales forecasts for this year
Shares in Serco were rallied today after the embattled outsourcing company reaffirmed its profit and sales forecasts for this financial year.
Shares in Serco closed up 7.7 per cent to 125.7p per share in London this afternoon. At the open this morning they had jumped as much as 13 per cent.
"Trading in the year to-date has been a little better than we anticipated," the company said in a first quarter trading update today.
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"Our expectations for the year as a whole remain unchanged from those we set out on 12 March 2015, with revenue likely to be around £3.5bn [and] trading profit around £90m."
"These expectations do not include any adjustment for disposals that may be completed over the remainder of 2015."
Serco also said it expects to report revenue of no less than £1.7bn for the first half of this year, and trading profit of no less than £45m for the same period.
Today's update came as chief executive Rupert Soames is enacting a turnaround plan for Serco, which has been hit by a succession of scandals, including one surrounding its tagging of criminals.
However analysts said while the first quarter appears to have gone well, Serco still has a long way to go.
"Serco's trading statement had an almost optimistic tone about it, with trading in the first half at least in-line with expectations and with the long process of re-shaping the group underway," Roger Johnston, analyst at Edison Investment Research, said.
"The overall process to get Serco back on track is still firmly just beginning, however the first half appears to have gone as well as expected which is the first time that has been said for some while,"
Serco said it will release its first half results on August 11.