TIDMSRP
RNS Number : 7008J
Serco Group PLC
30 June 2017
Close period update
30 June 2017
Serco Group plc
LEI: 549300PT2CIHYN5GWJ21
Serco Group plc ('Serco', or 'the Group'), the international
service company, will be in a close period between 1 July 2017 and
publication of the results for the first half of the financial year
on Thursday 3 August 2017. Serco will be holding meetings with
analysts today, during which no additional material information
will be disclosed.
For the first half, we expect to report revenue of approximately
GBP1.5bn and Underlying Trading Profit of around GBP35m. Order
intake to date has been very strong at around GBP2.4bn, which
includes our recently-signed contract worth GBP1.5bn to operate
Grafton prison. With GBP1.6bn booked in the second half of 2016,
which included GBP450m for Barts NHS Trust, order intake for the 12
months to 30 June 2017 will be around GBP4bn. This would be the
largest 12-month order intake for Serco since 2012, and represents
a book-to-bill ratio of approximately 130%.
In terms of comparative performance against the first half of
2016, reported revenue will, as expected, be broadly flat, with an
organic decline of approximately 8% being offset by a currency
translation benefit. As we said when we reported our results for
the first half of 2016, Underlying Trading Profit of GBP51m in the
first half of last year benefited from a number of non-recurring
trading items, and the first half profit of 2017 will be not
dissimilar to the GBP31m reported in the second half of 2016.
Our 2017 full year guidance for Revenue of approximately
GBP3.1bn and Underlying Trading Profit of between GBP65m and GBP70m
is unchanged, although the movement in currency since our last
statement in February may, if sustained, have a small negative
effect. We do however reiterate that the potential outcomes for the
year remain wider than the stated profit range, both to the upside
and the downside, due to the sensitivity of our profits to even
small percentage changes in either revenues or costs, as well as
movements in currency.
Our previous estimate of closing net debt of between GBP150m and
GBP200m at the end of 2017 is similarly unchanged, and is
equivalent to leverage for covenant purposes of between 1.2 and
1.7x EBITDA. Net debt at the half year is expected to be towards
the lower end of the range.
Commenting on today's update, Rupert Soames, Serco Group Chief
Executive, said: "The business has performed well in the first
half, which keeps us on track for the full year. The most striking
element is the order intake, which for two successive periods has
been very strong, totalling some GBP4bn in the last twelve months.
However, over the last six months the environment in several of our
markets has become markedly more unpredictable, so we remain
sensibly cautious.
"Our views are unchanged for 2017. We are working hard to
deliver our planned 'Transformation' phase, and although much still
remains to be done to execute the long-term turnaround of Serco, we
continue to track to plan and make good progress."
Ends
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
About Serco
Serco is a leading provider of public services. Our customers
are governments or others operating in the public sector. We gain
scale, expertise and diversification by operating internationally
across five sectors and four geographies: Defence, Justice &
Immigration, Transport, Health and Citizen Services, delivered in
UK & Europe, North America, Asia Pacific and the Middle
East.
More information can be found at www.serco.com
Forward looking statements
This announcement contains statements which are, or may be
deemed to be, "forward looking statements" which are prospective in
nature. All statements other than statements of historical fact are
forward looking statements. Generally, words such as "expect",
"anticipate", "may", "should", "will", "aspire", "aim", "plan",
"target", "goal", "ambition" and similar expressions identify
forward looking statements. By their nature, these forward looking
statements are subject to a number of known and unknown risks,
uncertainties and contingencies, and actual results and events
could differ materially from those currently being anticipated as
reflected in such statements. Factors which may cause future
outcomes to differ from those foreseen or implied in forward
looking statements include, but are not limited to: general
economic conditions and business conditions in Serco's markets;
contracts awarded to Serco; customers' acceptance of Serco's
products and services; operational problems; the actions of
competitors, trading partners, creditors, rating agencies and
others; the success or otherwise of partnering; changes in laws and
governmental regulations; regulatory or legal actions, including
the types of enforcement action pursued and the nature of remedies
sought or imposed; the receipt of relevant third party and/or
regulatory approvals; exchange rate fluctuations; the development
and use of new technology; changes in public expectations and other
changes to business conditions; wars and acts of terrorism; and
cyber-attacks. Many of these factors are beyond Serco's control or
influence. These forward looking statements speak only as of the
date of this announcement and have not been audited or otherwise
independently verified. Past performance should not be taken as an
indication or guarantee of future results and no representation or
warranty, express or implied, is made regarding future performance.
Except as required by any applicable law or regulation, Serco
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward looking statements
contained in this announcement to reflect any change in Serco's
expectations or any change in events, conditions or circumstances
on which any such statement is based after the date of this
announcement, or to keep current any other information contained in
this announcement. Accordingly, undue reliance should not be placed
on the forward looking statements.
Currency rates
Average rates Spot rates Closing rates
----------------------------- ------------------------ -------------------------------------
FY17e HY17 FY16 HY16 FY15 27 Jun 2017 21 Feb 2017 31 Dec 2016 30 Jun 2016 31 Dec 2015
GBP:US$ 1.27 1.26 1.37 1.44 1.53 1.28 1.25 1.23 1.35 1.47
GBPAus$ 1.68 1.68 1.84 1.96 2.04 1.68 1.63 1.70 1.81 2.02
GBP:Eur 1.15 1.17 1.23 1.30 1.38 1.13 1.17 1.17 1.21 1.36
----- ---- ---- ---- ---- ----------- ----------- ----------- ----------- -----------
The estimated average rate for FY17 is based upon the average
rate for the first half of the year together with the assumption
that the spot rates at 27 June 2017 prevail for the balance of the
year.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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June 30, 2017 02:04 ET (06:04 GMT)
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