Yahoo Finance

• Full-Year Revenue: In line with guidance.

• Second Half Profitability: Increased by 30% compared to the same period in the prior year.

• Underlying Operating Profit: Increased by 10% on a full-year basis.

• Margins: Improved into the 5% to 6% target range, with a 60 basis point improvement.

• Free Cash Flow: GBP150 million in the second half.

• Order Intake: GBP4.9 billion for the year, with a book-to-bill ratio of 102%.

• Net Debt: GBP100 million, with leverage at 0.3 times EBITDA.

• Dividend: Full-year dividend of 4.16p per share, a 22% increase from the previous year.

• Organic Revenue Growth: Minus 3% for the full year, flat in the second half.

• Operating Profit Margin: Improved by 60 basis points in 2024.

• North America Organic Revenue: Up 1% for the full year, with a 5% increase in the second half.

• UK and Europe Operating Profit: Increased by 22% to GBP148 million in 2024.

• UK and Europe Margin: Improved by 280 basis points since 2022, reaching 6% in 2024.

• Asia Pacific Organic Revenue Growth: 6% in the second half of the year.

• Middle East Revenue: Down 3% on a constant currency basis.

• Cash Conversion: Over 100% of trading profit converted to cash on average over the last five years.

• Capital Allocation: GBP140 million share buyback completed in 2024.

• Guidance for 2025: Revenue similar to 2024, with underlying organic growth of 7% offsetting reductions.

• Warning! GuruFocus has detected 5 Warning Signs with OCDDY.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Serco Group PLC (SCGPY) achieved a 30% increase in second-half profitability compared to the same period in the prior year.

• The company delivered a meaningful improvement in margins, reaching the 5% to 6% target range.

• Serco Group PLC (SCGPY) reported a strong cash close for the year, enabling delivery on all elements of its capital allocation framework.

• The company maintained a high customer retention rate of over 95% in its two largest geographies.

• Serco Group PLC (SCGPY) entered 2025 with a robust pipeline of new business opportunities, including a decade-high pipeline of good quality opportunities.

Negative Points

• Organic revenue growth for the full year was negative, with a 3% decline, although it was flat in the second half.

• The company faced a disappointing outcome with the Australian immigration rebate, impacting its order intake.

• Serco Group PLC (SCGPY) booked a non-cash exceptional permanent charge of GBP150 million against the Asia Pacific goodwill asset.

• The UK Armed Forces recruitment contract will not start until 2027, delaying potential revenue from this contract.

• The company faces cost pressures, including the increase in UK National Insurance, which may impact future profitability.