25 May 2016 | James Richards
Serco has reported a stronger-than-expected financial performance in the first four months of 2016. But, it warned that this upturn comes “from items that will not reoccur.”
In a financial performance update released yesterday (26 May), the international service company said it now expects revenue for 2016 to be £2.9 billion and underlying profit of not less than £65 million.
Previous estimations had predicted that revenue would be around £2.8 billion, with an underlying trading profit of £50 million.
Serco does not expect these revised figures to affect its estimation for 2017.
According to the statement, the stronger-than-predicted performance was because of a number of factors. Among them was the successful outcome of a number of commercial negotiations, and several contracts in the US that “were anticipated to end early have run on longer”, for example, those with Virginia Transport and the US Army.
Also, a contract with Northern Rail in the UK involved a “more favourable” final settlement than originally budgeted.
Rupert Soames, Serco Group chief executive, said: “It is encouraging that we are able to announce an upgrade to our guidance for the year, albeit that much of this improvement comes from items that will not reoccur.
“There remains much to do in order to complete our transformation this year and next, but we are continuing to make good progress on the roadmap we have set out through to 2020.”