Serco, the services group, has delivered solid results for the financial year ended on December 31, 2011. It recorded robust growth in revenues including good organic growth, increased the operating margins and maintained a strong cash generation profile and financing position. The group's total revenue rose to £4,646.4 million, an increase of 7.4% compared to £4,326.7 million in 2010 and reported its highest-ever international mix, with 44% of total group revenue now generated outside the UK. It also raised the dividend by14.3% to 8.40p, reflecting growth in adjusted earnings
For 2012, the group is forecasting another year of strong total revenue growth: this includes the contribution from acquisitions completed to date, together with further good organic growth. At this early stage of the financial year, its forecasts reflect the balance of risks and opportunities; it expects challenging conditions to remain in the US, but anticipates some further improvement in the UK markets and another strong performance in AMEAA.
The phasing during 2012 is likely to see organic growth weighted to the second half and the contribution from completed acquisitions weighted to the first half. Organisational changes are expected to have a broadly neutral impact on the full-year margin, but due to the timing of the implementation, costs are likely to more than offset the underlying improvement in the first half.
Christopher Hyman, Chief Executive of Serco Group says: "I am pleased with our solid operational performance and the number of contracts wins which have underpinned our strong financial result for 2011. Whilst challenges remain in the US and some UK markets, the breadth of our portfolio around the world and in the AMEAA region in particular, continues to present many new prospects. Our order book has grown, our pipeline of opportunities is large and we are now preparing for the next stage of growth which includes our entry into the global BPO market. This gives us confidence for the future."
Serco anticipates it will achieve a modest improvement in the rate of organic revenue growth in 2013 and further improvement in the medium term provided the market conditions around the world continue to improve.