SERCO GROUP PLC: Pre-close announcement
28 June 2013
Ahead of Serco Group plc entering its close period for the half-year ending 30 June 2013, and following the recent Interim Management Statement released on 15 May 2013, we will be holding our customary pre-close meetings with analysts over the coming days. No new material information will be disclosed. The Group is on track to meet expectations for 2013: for the full year, we expect a modest improvement in the rate of organic revenue growth and the Adjusted operating margin to be broadly maintained around the level achieved in 2012. We remain confident in the ongoing resilience, overall outlook and future growth prospects for the Group.
For the first half of 2013, we expect to report strong organic revenue growth ahead of our expectations. This is driven in part by last year's record level of contract awards, many of which only started part way through last year, together with additional revenue from certain volume-related and project-based work. The effect of last year's acquisitions and disposals has a broadly neutral impact on total revenue growth.
Supporting the strong pipeline and market opportunities in the Global Services division, the level of investment in contract bidding and new market development activity has increased. Including the effect of this, a small reduction in the Adjusted operating margin for the Group as a whole is anticipated for the first half of 2013. The comparable period's Adjusted operating margin, before the reorganisation costs incurred in 2012, was 5.9%.
The net effect of stronger revenue growth and the small reduction in Adjusted operating margin is expected to result in an Adjusted operating profit for the half-year that is in line with our original expectations.
Driven principally by the incremental working capital investment that is supporting BPO growth as previously disclosed, the phasing of free cash generation over the course of 2013 is anticipated to be broadly similar to the prior financial year.
Serco will release its half-year results on Thursday 29August 2013. As previously described, our reporting will now reflect the changes to accounting standards IAS19 and IFRS11. Neither of these have a material impact on the Group's reported earnings. A restatement of the 2012 financial year (as previously provided) and the first half of 2012 is published today on www.serco.com.
For further information please contact Serco:
Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 227
Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 226
Serco is a FTSE 100 international service company, which combines commercial know-how with a deep public service ethos.
Around the world, we improve essential services by managing people, processes, technology and assets more effectively. We advise policy makers, design innovative solutions, integrate systems and - most of all - deliver to the public.
Serco supports governments, agencies and companies who seek a trusted partner with a solid track record of providing assured service excellence. Our people offer operational, management and consulting expertise in the aviation, BPO, defence, education, environmental services, facilities management, health, home affairs, information and communications technology, knowledge services, local government, science and nuclear, transport, welfare to work and the commercial sectors.
More information can be found at www.serco.com
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