- A lower effective tax rate saw support services firm Serco guide for earnings per share for 2018 and 2019 to come in ahead of consensus expectations by between 5% and 10%.

The company also confirmed closing net debt would be lower than previously expected at around £200m with leverage improving to 1.2 times to 1.3 times.

Trading profit for 2018 and 2019 was guided to be in line with previous guidance at £90m to £95m and £95m to £100m respectively. The company also renewed its £250m lending facility for another five years on unchanged terms.

Chief executive Rupert Soames said:'As we predicted when we set out our five-year strategy in 2015, profits have grown strongly in 2018 with margins increasing as a result of improved operational performance and cost reduction.

'With revenues no longer reducing, cash generation turning positive and the benefit of a strong balance sheet, we are pleased with progress, and we expect further improvement in 2019.'

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