Serco sees UK headwinds

2nd Mar 2011 07:28

Outsource giant Serco expects "headwinds" in 2011 as the government's austerity measures bite, but still expects to make progress towards its 2012 targets.Serco posted strong figures for 2010 with profits up by 21% to £214m, from £177m, on sales up 9% to £4.33bn. Underlining the performance, the dividend for 2010 rises by nearly 18% to 7.35p."For 2011, we expect good organic revenue growth and progress towards our 2012margin guidance. Whilst this reflects the contracts we have won in 2010 andthe opportunities we expect to see across our regions during 2011, we have alsotaken into account the headwinds in the UK," it said.At end 2010, the order book stood at £16.6bn, compared with £17.1bn at the end of 2009. This included contract signings during the year, the ending of UK Flexible New Deal contracts and cost savings on a number of contracts delivered to the UK Cabinet Office. "We had visibility, at 31 December, of 92% of planned revenue for 2011, 77% for 2012 and 66% for 2013. Our pipeline of opportunities is currently £29bn," it said."Prospects beyond the current year are encouraging and we continue to expect, by the end of 2012, an increase in revenue to approximately £5bn and in adjusted operating profit margin to approximately 6.3%," it added.