Serco hit by tough markets in first half

29th Aug 2012 07:04

Outsourcing group Serco was hit by tough markets and reorganising costs in the first half but said it expected a strong showing in the second.Revenue was up 4.3% to £2.3bn, with adjusted pre-tax profit down 17.4% to £102.1m.Organic revenue, which strips out acquisitions and currency effects, dropped by 2.1%Ignoring reorganisation costs, profits were down 4.7% to £117.8m, with the company citing challenging US market conditions.However, the firm pushed its dividend up 6% to 2.65p, in line with underlying earnings.Conditions remained very difficult and uncertain for US federal outsourcing market, it said.But further excellent revenue growth in AMEAA - where revenues were up 22% -and areas of improvement in the UK provided balance, it added.Serco said it expected to deliver a year of good organic revenue growth for the group overall in 2012, with first half decline of 2% set to improve off the back of strong second half growth driven by previously announced contract wins.In the first half of 2012 the firm signed contracts valued at £3.7bn and was appointed preferred bidder for a further £0.5bn.The total £4.2bn of awards compares with £2.5bn in the equivalent period in 2011.