Serco Share Discussion Threads

[mj19] 06/8/2020 08:40

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

[mallorca 9] 06/8/2020 08:16

I'm in on that fall.

Thank you.

[18bt] 06/8/2020 08:04

Cracking set of results - and showing sensible social responsibility in the comments on repaying loans and not taking the £1,000 job continuation payments. I'm fully expecting dividend payaments to recommence from Q4. I'm afraid this shows that Governments need well run companies like Serco to deliver quickly - the public sector on its own just cannot staff up properly in a panic as has been shown. As much as some don't like it, SRP is miles ahead of where it was and it ain't going away.

[palwing32] 05/8/2020 11:01

ducktack. Yes, I have to agree with you. We STILL live in corrupt times and the "old boys network" is still in existence and has been so since time immemorial. However, we can't change that, so perhaps just ride the wave and hopefully make a few quid on the side. As I think you suggest, the chart is looking promising.Hopefully SRP have their Government contracts well written, so that if the sh1t hits the fan ref housing illegal immigrants at the TAX payers expense, SRP still get paid until the end of any such contracts. If they haven't, then it would be very short sighted of them. Only time and world events will tell. GLA.

[ducktack] 04/8/2020 23:59

This company is putting up illegal migrants at the tax payers expense as well as so many other dodgy deals. It's now becoming national knowledge that Mr. Soames who runs it has his brother in government.........how coincidental. Hope you feel proud but your taxes will be paying for your profits. The number's up. Great.Chart wise......double top anyone??

[dealy] 03/8/2020 09:47

sorry, but Capita EV is only about 1 billion. So EV/ Sales is about 0.3

[18bt] 03/8/2020 09:40

I think it is a useful metric for PLCs (and particularly for the highly geared ones) because it shows how much of the enterprise value of the business is debt and how mucg equity. In CPI's case, the enterprise value is something like £1.91 bn for which you get turnover of c£3.3bn. The comparative for SRP is £2.38bn of EV for which you get turnover of £3.71bn - so not much difference in the EV/turnover. CPI has a much better EBIT/EV ratio because of the risk in the debt. Agreed CPI is selling businesses, but it is selling profitable businesses, so profits will decrease as a result, making the PER less relevant as a measurement. I never like EBITDA as it is just an excuse to forget about that fixed assets need replacing and, whilst I haven't researched it, you'd need to look at CPI's policies for capitalising software.

Anyway, a healthy debate.

[dealy] 03/8/2020 09:26

Thanks for the post but there is no financial metric that relates market to net debt. Market cap is a sentiment driven variable, not a financial measurement per se like Ebitda or cash flow. Private companies for example have no market cap per se. Net debt to cash flow or Ebitda are important for sure. Also capita is eyeing disposals right now of software businesses worth several hundred million. This will improve the balance sheet

[18bt] 03/8/2020 09:15

CPI expecting fall in both turnover and profit in 2020 before recovering vs 14% turnover growth and 15% EPS growth at SRP- admittedly that's reflected on 6x PER for CPI vs 22 for SRP, but consensus forecast history has been on the up for SRP. The real problem at CPI though is debt which is 3x the market cap and pension deficit as well - that will allow SRP to keep growing whereas CPI will have to downsize. I don't deny CPI is cheap, but I think that's for a reason.

[dealy] 03/8/2020 09:05

5 times better run as reflected in the valuation disparity or just marginally better run?

[18bt] 03/8/2020 07:39

SRP is now a much better run company than capita.

[dealy] 02/8/2020 20:52

if you like this you should buy capita. Serco has recovered to its pre March level whereas Capita would have to quadruple to do that.

[palwing32] 29/7/2020 13:05

hTTps://www.britishbulls.com/SignalPage.aspx?lang=en&Ticker=SRP.L

[skiski] 27/7/2020 21:06

Buy this share... support tyranny

[18bt] 27/7/2020 16:11

Any chance that they might be awarded one of the COVID testing contracts as the Army aaprently handing over to private contractors in next few weeks?

[palwing32] 27/7/2020 09:51

This time perhaps?

[palwing32] 21/7/2020 10:03

SP is having another go at breaking north.

[palwing32] 11/7/2020 09:54

Looks like we have found a support level for the share price and it is itching to break north. One to watch for sure, in my opinion. GLA

[brain smiley] 18/6/2020 22:57

A third of Serco's profits come the defence industry and 100% of it's revenue from governments.With government cutbacks ahead ,Serco must be vunerable;especially on a forecast 2020 PE of 22 and a 2021 PE of 19.5.If the democrats win the presidency and/or the Senate, defence spending could be cut.Any thoughts?

[palwing32] 17/6/2020 16:34

Not much of a sell off at the close, so reassuring we actually have a break out. Now to find the new support level perhaps? GLA.

[babbler] 17/6/2020 13:50

It's doubled in a month or so from the low.

[dealy] 17/6/2020 11:27

capita has completely lagged the sector here. maybe a catch up play?

[babbler] 17/6/2020 10:41

Minimal covid impact and 50 percent profit increase? I'd say so...