Serco hit by US squeeze

International outsourcing firm Serco said it was on track for 2012 but expects revenues in the first half to take a hit from tough conditions in America.

In a statement ahead of the firm's half year end, Serco said it expected strong total revenue growth in 2012, including good organic growth.

But it forecast that adjusted operating margins would be flat in the first half compared to the corresponding period in 2011.

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Serco noted further strong growth in AMEAA, an improving outlook in the UK, but said conditions in the US federal market remained very tough for its Americas division.

"Accordingly, for the first half of the year, we expect a small reduction in the group's organic revenue," it said.

"Acquisitions will contribute growth of approximately 6% to the group's total revenue," it added.

The firm said its financial performance would be weighted to the second half of the year when it expected a strong result.

This would come through new contract awards recently secured, the successful conclusion of a change programme, and the benefit of recent acquisitions, it said.