Serco on track for 2012

published 20 December 2012

Outsourcing giant Serco said it was on track to meet expectations for 2012 as it announced the sale of two operations at a loss.

The firm said it expected to deliver a year of strong total revenue growth, including good organic growth.

It also said it would post an increase in adjusted operating margin similar to that achieved in 2011 when it releases its full year results in March 2013.

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Exceptional items are expected to have a broadly neutral impact on the company's income statement for the 2012 financial year.

Serco has agreed to sell its education software and UK data hosting operations for a loss.

It said those businesses had become non-core to the ongoing development of the group and had both experienced significant changes in market conditions.

The £6m deal will mean a provisional non-cash exceptional accounting loss on disposal of approximately £25m, the company said.

For the year to the end of December 2011, the financial result of these operations was approximately £14m of revenue and £2m of adjusted operating profit.

Chief Executive Chris Hyman said he was pleased with the operational and financial performance delivered by the Group in 2012, particularly in the light of challenging conditions in some of the firm's markets.

In a separate announcement, Serco set out its plans to establish an independent charitable foundation to mark its 25th year as a publicly traded company.

The firm is making a one-off endowment of £5m to the Serco Foundation and will provide ongoing

support for its stated mission to "help charities through the application of Serco's people, skills and capabilities".