(Alliance News) - Serco Group PLC on Thursday lifted its annual guidance as both revenue and profit increased in the first half of 2022, along with a rise in payouts.
For the six months that ended on June 30, the FTSE 250-listed outsourcer said revenue inched up 0.5% to GBP2.18 billion from GBP2.17 billion a year earlier. Pretax profit was up 10% to GBP114.0 million from GBP103.7 million.
"We did much better in the first half than we expected in January, and as a consequence also expect to do better than we originally anticipated in the full year," Chief Executive Rupert Soames said.
Serco said the rise in revenue was a result of the increased demand for "case management in North America, employment services in the UK, immigration services in both Australia and the UK, which more than offset the impact of Test & Trace".
Serco lifted dividends by 18% to 0.94 pence per share from 0.80p a year prior.
Shares were up 2.1% at 188.85 pence in London late on Thursday morning, having reached 195.49p earlier in the day.
The company added that it is upping its underlying trading profit guidance to GBP230 million to reflect further foreign exchange movement, from a previous forecast of GBP225 million.
However, Serco cautioned: "Second-half profit is expected to be lower than the first six months due to our Test & Trace work having ended, usual seasonality on some contracts including our CMS healthcare eligibility contract in the US, lower volumes on our immigration services contract in Australia, above-budget pay increases and one-off payments to non-management staff. The first-half second-half split of profits in 2022 is expected to be similar to 2021."
For the first half, underlying trading profit rose by 6.0% to GBP130 million from GBP123 million a year earlier.
By Xindi Wei; xindiwei@alliancenews.com
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Serco (SRP)