• Rate this Story
  • 0
  • 0

March 5, 2013 7:14 PM EST

British outsourcer Serco posted a 6 percent rise in annual profit, as new back office and Australian immigration contracts helped ride out weak markets in the United States.

Serco, which runs facilities ranging from Britain's Atomic Weapons Establishment to immigration detention centres in Australia, had said adjusted pretax profit for 2012 was 278.1 million pounds, ahead of analysts' consensus of 269.6 million pounds, according to a Thomson Reuters poll.

Group revenue rose 5.7 percent to just over 4.9 billion.

The group's performance, however, was held back by its Americas division which saw a 14 percent decline in organic revenue after months of budget uncertainty there.

Serco makes around a fifth of its sales in the U.S., primarily from the federal government, where automatic spending cuts of around $85 billion were triggered on Friday. Half of the cuts will fall on the Pentagon, an area in which Serco is traditionally strong.

The best performers were its new business process outsourcing unit, where organic revenue grew 12 percent. Also its Australasia, Middle East, Asia and Africa region where organic revenue growth was 22 percent, helped by new immigration services contracts in Australia.

Serco said it had signed a record level of contracts in 2012, valued at 5.6 billion pounds.

It proposed a 2012 total dividend of 10.10p, up 20 percent on last year, which is said reflects a new policy to accelerate dividend growth on the path to a higher payout ratio.

Serco said that it is forecasting a modest improvement in organic revenue growth in 2013, echoing comments made by rival outsourcer Capita in its full year results on Thursday.

Mid-cap out performance has brought Serco to the cusp of a FTSE 100 exit, despite the shares having risen 8.22 percent so far this year.

(Reporting By Christine Murray; Editing by Neil Maidment)

  • Rate this Story
  • 0
  • 0
Copyright 2012 Thomson Reuters UK. All rights reserved.

Join the Conversation

IBTimes TV

E-Newsletters

We value your privacy. Your email address will not be shared.