StockMarketWire.com - Outsourced services provider Serco has announced revenue grew by 24% in the first half and profits also rose, boosted by contract wins in 2019 and the acquisition of the Naval Systems Business Unit of Alion last August, while COVID-19 had 'little effect' on profits.

In its results for the six months to 30 June 2020, the company reported revenue £1.8bn, with organic growth of 15% and a 9% uplift from the Naval Systems Business Unit (NSBU) in North America acquisition.

Underlying trading profit climbed 53% to £78m in the first half of the year, with NSBU adding 20%, while reported operating profit increased by £72m to £89m.

Serco said its order intake during the period was 'strong' at £1.9bn, with approximately 60% of the order intake related to existing contracts being rebid or extended and 40% being new work. This took the order book from £14.1bn at the end of 2019 to £14.5bn.

Group chief executive Rupert Soames called its first-half performance 'exceptionally strong' and said that while Covid-19 has had little effect on profits, 'there have been some dramatic impacts, positive and negative, on individual contracts'.

Soames added: 'Pleasingly, at a time when a number of tenders have been delayed as a result of the crisis, our order intake was once again ahead of our revenues giving us a positive book-to-bill ratio.'

Serco saw free cash flow increase by £80m year-on-year, as cash flow benefitted from tax payment deferrals of around £49m, although the company said that subject to trading in the second half, it intends to pay taxes deferred by the end of the year.

At 8:27am: [LON:SRP] Serco Group PLC share price was -16.9p at 152.5p



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