The Serco Group PLC Board has decided to declare an interim dividend of 0.8p in respect of the first half of 2021. The Board has decided, given the uncertainties last year, not to declare an interim dividend in 2020. They paid a final dividend of 1.4p per share in respect of 2020, and if the normal approach of paying about one-third of an expected annual dividend at the interim stage and two-thirds at the Final stage had been followed, it would have implied an interim in 2020 of about 0.7p. An amount roughly equivalent to this was included in the calculation of the quantum of the share buyback programme announced in December 2020. In this context an interim dividend of 0.8p would represent an increase of around 15% on the 0.7p that was notionally foregone in 2020.
Other financial highlights include:
● Revenue grew by 19% to £2.2bn, with organic growth of 15%, a 5% uplift from acquisitions and a 1% FX drag.
● Underlying Trading Profit increased by 58% to £123m; 8%, or £6m, contributed by acquisitions of Facilities First in Australia and WBB in North America.
● Group Margin strengthened from 4.3% to 5.7%.
● Reported Operating Profit increased by 31%.
● Diluted Underlying EPS increased by 75%, reflecting the growth in Underlying Trading Profit, unchanged finance costs and a lower effective tax rate. Reported EPS benefits from one-off credit of £155m on recognition of an increased UK tax asset.
● Free Cash Flow up 61% to £130m, supported by strong cash collections and some favourable timing effects.
● Adjusted Net Debt increased by £82m to £225m in the last 12 months, despite spend of £249m on acquisitions and £40m on share buy-backs. Covenant leverage 1.0x EBITDA (2020: 0.7x).
● Order Intake was extremely strong at £4.1bn, 190% book-to-bill. Approximately 60% of the order intake related to new work and 40% contracts being rebid. Pipeline of £5.8bn up 40% year-on-year, and largely rebuilt since the start of the year despite exceptionally strong order intake.
● Order Book increased from £13.5bn at the end of 2020 to £14.1bn.
