Serco trading in line despite problems

3rd Jul 2014 07:10

- Trading in line with expectations- Strategy Review proceeding according to plan- Financial position steadyGovernment outsourcing group Serco said, while difficulties continue on some contracts, overall its trading and financial position has been in line with expectations since its last update two months ago.The group, which in April announced the resignation of its long-standing Chief Financial Officer Andrew Jenner and an emergency fundraising to bolster its balance sheet, said it is rebuilding trust and confidence with the UK Government and its strategy review is proceeding according to plan.Serco, which is facing an investigation following problems on a prisoner tagging contract, said adjusted operating profit at constant currency would be not less than £170m for the financial year or around £155m at reported currency. Operating profit totalled £144 in 2013.For the first half of the year, it expects to report adjusted revenue of approximately £2.4bn, which is broadly flat on an organic basis.As already outlined in its update in April, margins in the first half will be significantly lower than the same period last year. Over £2bn of contracts have been awarded during the period, it added.Otherwise Serco said good progress has been made in implementing the Corporate Renewal Programme, with the estimated one-off costs associated with this remaining at approximately £15m for the year with about 50% of this to be charged in the first half. CJ