Serco reinstates dividend as profits rise

26th Feb 2020 08:03

(Sharecast News) - Public services provider Serco said it would reinstate a dividend for the first time since 2014 as full year profits increased 25%.


The company, which runs Britain's immigration detention centres and among other public services, said on Wednesday that it will pay a 2019 full-year dividend of 1.0p per share on the back of new business wins overseas as it achieved what it called "escape velocity".

Serco reported a 25% jump in underlying profits to ?120m and guided towards a further increase to ?145m for 2020.

Revenues were up 15% at ?3.24bn, while diluted underlying earnings per share grew 18% to 6.16p. Net debt ballooned to ?584.4m from ?188m.

Chief executive Rupert Soames said: "The results for 2019 represent the first year of revenue growth since 2013 and the second successive year of growth in profits, and we expect continued strong progress in 2020.

"All this indicates that we have finally achieved escape velocity, leaving behind the gravitational pull of past missteps, and gives the board confidence to recommend paying a dividend for the first time since 2014, which is an important milestone."

As of 0920 GMT, Serco shares were up 0.93% at 152.10p.