Serco profits grow as defence segment shines; buyback increased

(Sharecast News) - Serco lifted its share buyback programme on Thursday as it reported a jump in first-half profit and revenue, hailing a particularly strong performance from the defence arm.

In the six months to the end of June, underlying operating profit was 8% higher at �157m, while revenue rose 4% to �2.5bn. Serco said that following significant order intake last year, the defence segment performed particularly well, delivering organic revenue growth of 10%.

The interim dividend was lifted 10% on the same period a year earlier to 1.60p per share and Serco said it was increasing its buyback from �75m to �150m for the year, �75m of which completed post period end in July.

Chief executive Anthony Kirby said; "Thanks to the dedication and delivery of more than 50,000 colleagues globally, the group delivered another strong performance in the first half.

"The group achieved good profitable growth in the period, which reflects further strategic and operational execution, with continued double-digit organic growth in Defence, progress in Asia Pacific, and contract performance and productivity enhancements across the business. This performance supports the new �75m share buyback announced today.

"Looking ahead, we are on track for our full-year guidance reflecting our excellent retention rates, order book visibility, contract mobilisations in the UK and Australia, and an anticipated improvement in the North America procurement environment. Our productivity and efficiency programmes underpin an expected year-on-year increase in profits."

At 1116 BST, the shares were up 6.4% at 258.20p.

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