Serco’s trading
Form is temporary and class is permanent, they say. And Serco is certianly one of the sector’s class acts. But there have recently been whispers about a dip in form - not winning the nuclear de-commissioning role was uncharacteristic.
So what does the latest news tell us about how things are going?
The papers and tip sheets have been purring about £2bn of contract wins in the last six months, from Aussie prisons to Dubai airports. But this needs to be put into context: Serco’s a big group these days.
Its £16bn order book at y/e 2008 was the envy of the sector (at 5.2x sales its the largest of the 37 companies Credo tracks). But given Serco’s 10%+ annual growth target, it has ran through £1.6bn of this book in the first half. Adding £2bn of new wins leaves the book ahead just £400m, or 2%.
That’s a lot of new contracts, and a pleasing return to form, but not quite back to its best.
