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Serco year profits up, says made good 2004 start
(Adds analysts' comments, shares)
By Victoria Cutler
LONDON, March 2 (Reuters) - British industrial and government services firm Serco Group Plc (LSE: SRP.L - news) reported a rise in annual profits on Tuesday and a strong order book as it continued to win contracts to run public facilities.
Serco, which manages and operates call centres, speed cameras and prisons for government bodies, said it had already secured 93 percent of its planned 2004 turnover, assuming a continuing 90 percent renewal rate on contracts.
It said it had a forward order book worth 10.3 billion pounds ($19.24 billion) and had submitted or was evaluating bids worth five billion pounds.
"The opportunities in our markets continue to grow, driven by unremitting pressure on governments to deliver value for taxpayers' money," Serco said in a statement, adding it was confident it could sustain more strong earnings growth.
Serco shares rose 6.3 percent to 219 pence.
The firm reported pre-tax profits before goodwill amortisation for calendar 2003 of 67 million pounds, against 57 million a year earlier. Before exceptional items, the result was 63.4 million pounds, in line with analysts' forecasts of around 63 million pounds.
It announced a final dividend of 1.62 pence per share, giving a total for the year of 2.34 pence -- up 12.5 percent on the previous year.
Analysts at Dresdner Kleinwort Wasserstein upgraded the stock to "hold" from "reduce", cheering free cashflow of 47 million pounds and the firm's bullish outlook.
Altium Capital analyst Andrew Nussey said underlying visibility on revenues had continued to improve, adding that he expected to raise his forecasts for future years by around three percent. He left his "add" rating unchanged.
The stock has gained around 63 percent in the past 12 months, outperforming its support services peers by around 19 percent and the mid-cap index by around 10 percent.
Serco won contracts worth 4.6 billion pounds in 2003, including a 25-year contract to run the Merseyrail train route in northern England with its joint venture partner, Ned Railways. The contract is worth 1.8 billion pounds to Serco.
Serco year profits up, says made good 2004 start
(Adds analysts' comments, shares)
By Victoria Cutler
LONDON, March 2 (Reuters) - British industrial and government services firm Serco Group Plc (LSE: SRP.L - news) reported a rise in annual profits on Tuesday and a strong order book as it continued to win contracts to run public facilities.
Serco, which manages and operates call centres, speed cameras and prisons for government bodies, said it had already secured 93 percent of its planned 2004 turnover, assuming a continuing 90 percent renewal rate on contracts.
It said it had a forward order book worth 10.3 billion pounds ($19.24 billion) and had submitted or was evaluating bids worth five billion pounds.
"The opportunities in our markets continue to grow, driven by unremitting pressure on governments to deliver value for taxpayers' money," Serco said in a statement, adding it was confident it could sustain more strong earnings growth.
Serco shares rose 6.3 percent to 219 pence.
The firm reported pre-tax profits before goodwill amortisation for calendar 2003 of 67 million pounds, against 57 million a year earlier. Before exceptional items, the result was 63.4 million pounds, in line with analysts' forecasts of around 63 million pounds.
It announced a final dividend of 1.62 pence per share, giving a total for the year of 2.34 pence -- up 12.5 percent on the previous year.
Analysts at Dresdner Kleinwort Wasserstein upgraded the stock to "hold" from "reduce", cheering free cashflow of 47 million pounds and the firm's bullish outlook.
Altium Capital analyst Andrew Nussey said underlying visibility on revenues had continued to improve, adding that he expected to raise his forecasts for future years by around three percent. He left his "add" rating unchanged.
The stock has gained around 63 percent in the past 12 months, outperforming its support services peers by around 19 percent and the mid-cap index by around 10 percent.
Serco won contracts worth 4.6 billion pounds in 2003, including a 25-year contract to run the Merseyrail train route in northern England with its joint venture partner, Ned Railways. The contract is worth 1.8 billion pounds to Serco.
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