Contract awards drive strong growth at Serco

Serco, the British outsourcing giant, said that last year's record level of contract awards drove strong organic revenue growth in the first half and it remains on track to hit full-year targets.

Serco, the British outsourcing giant, said that last year's record level of contract awards drove strong organic revenue growth in the first half and it remains on track to hit full-year targets.

The company said that for 2013 it still expects a modest acceleration in the 3.3% organic growth seen in 2012.

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"We have begun 2013 with many important new contracts underway and have achieved a good operational performance across our activities around the world," said Chief Executive Christopher Hyman.

The company has recognised a total of £0.9bn of contract awards since the start of the year.

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Hyman said that Serco's global Business Process Outsourcing (BPO) division and the Africa, Middle East, Asia and Australian (AMEAA) regions are delivering "further excellent organic revenue growth".

However in the Americas division, conditions still remain "challenging" in the US federal contracting market due to sequestration, budget cuts and funding issues.

Meanwhile, markets in the UK are showing "encouraging" signs as the firm secured a BPO contract for a High Street retailer as well as contract extensions with the government.

The adjusted operating margin for the full year is expected to be broadly flat at 6.4% as the company invests in contract bidding and sees new market development activity.

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