Serco delivers steady performance in FY25

(Sharecast News) - Public services manager Serco said on Thursday that it had delivered a steady performance in 2025, with both revenues and operating profits improving. Serco said revenues had risen 3% at constant currency rates to £4.9bn, including 1% organic growth, supported by contract wins across defence and citizen services that helped offset lower activity in the UK and Australian immigration work.

Underlying operating profits edged 1% higher at constant currency to £272m, while underlying earnings per share grew 2% to 16.93p. Reported operating profits surged 89% to £246m.

Serco said order intake came to £5.5bn, with a book-to-bill ratio of 114%, and reported an increased order book of £14.5bn, 9% higher than end of 2024.

The FTSE 250-listed group also generated £219m of free cash flow in FY25, comfortably ahead of guidance, and unveiled a further £75m share buyback, taking total repurchases since 2021 to £465m. Additionally, Serco lifted its final dividend by 8% to 3.05p per share.

Looking ahead, Serco reiterated its FY26 outlook, guiding for around £5bn in revenue with roughly 3% organic growth and underlying operating profits of about £300m.

Chief executive Anthony Kirby said: "We expect elevated geopolitical tension and policy complexity to remain a feature of the market in the near term, although the structural drivers of demand will continue to intensify. Pressures are increasing on governments to do more and better for less - we stand ready to support them in doing just that.

"We enter 2026 in a robust financial position, with a strengthened management team and a continued focus on operational discipline. We are well placed to deliver increased organic revenue growth and underlying operating profit, with good cash generation supporting our new share buyback"

As of 0825 GMT, Serco shares were down 3.36% at 293.40p.

Reporting by Iain Gilbert at Sharecast.com