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Serco wins a record number of contracts
OUTSOURCING group Serco has posted a rise in pre-tax profits as it won a record number of contracts in 2012.
The business, which runs the Northern Rail contract based in York and the International Fire Training Centre at Durham Tees Valley Airport, won £5.8bn worth of contracts last year, up from £5.1bn in 2011.
Shares in the group jumped 11 per cent following the announcement that Serco had seen a 6 per cent rise in adjusted pre-tax profit for 2012 to £278.1m. Organic revenue, which excludes acquisitions, rose 3.3 per cent, while margins edged up to 6.4 per cent from 6.2 per cent the year before.
The group also increased its total dividend by 20 per cent to 10.10p and said more increases were on the cards.
Its order book rose to £19.1bn in 2012, up from £17.9bn in the previous year. The group's vast range of activites sees it inspects Britain’s schools, train the armed forces, maintain nuclear weapons and operate prisons.
Serco benefited last year as new Australian immigration contracts helped offset sluggish markets in the United States, where it makes about a fifth of its revenue.
Christopher Hyman, Serco chief executive, said: “Last year was a strong year for us despite some very real challenges; we won more work than ever, we entered new markets, we built more capabilities and we established a global BPO business.
“This confidence in our business prospects underpins our new dividend policy and commitment to a higher payout ratio over the coming years.”
Serco is hoping to retain its position in the FSTE 100 ahead of the FTSE Group’s index review today (Wednesday). It is a candidate for demotion to the FTSE 250, which will be based on the market values of London-listed companies at the close of business yesterday.