Serco Group plc

Reported 2025 revenue was GBP 4.9 billion, up 3% at constant currency, with organic revenue growth of 1%. Underlying operating profit was GBP 272 million, up 1% at constant currency, and the margin was 5.6%. Return on invested capital was 26%, cash flow was GBP 219 million, and trading cash conversion was 112%. Order intake was GBP 5.5 billion, book-to-bill was 114%, and the pipeline ended at GBP 12.1 billion. For 2026, management guided to revenue of around GBP 5 billion, organic growth of 3%, underlying operating profit of around GBP 300 million, margin of around 6%, net finance costs of around GBP 52 million, free cash flow of around GBP 160 million, and adjusted net debt of GBP 165 million.

Anthony Kirby framed 2025 as a year of disciplined execution, strategic focus and strengthening competitive position. He emphasized Serco’s shift toward its strongest areas — Defence, Justice & Immigration and Citizen Services — and said the company is doubling down on geographies and sectors where it has the most differentiated capabilities. His tone was confident and upbeat, repeatedly stressing long-term structural demand, resilience in mission-critical services and confidence in the 2026 outlook.

Nigel Crossley said 2025 performance reflected strong momentum despite anticipated headwinds, including the Australian immigration contract exit and higher UK national insurance costs. He highlighted GBP 4.9 billion of revenue, GBP 272 million of underlying operating profit, a 5.6% margin, GBP 219 million of cash flow, 112% trading cash conversion, and 0.7x year-end leverage. He also noted adjusted net debt rose to GBP 206 million mainly due to the GBP 245 million MT&S acquisition and capital returns, and he proposed a 4.5p dividend, up 8%, plus a new GBP 75 million buyback for H1 2026.

Analysts focused on mobilization costs, competition in the UK, migration exposure, the contract pipeline, MT&S integration, North American margin durability, APAC recovery, and the impact of US government delays. Management said contract mobilization costs were higher than usual by about GBP 20 million, mostly in the UK, while competition in the UK had not materially changed and typically involved 5 to 6 bidders. They also said MT&S is fitting well, US activity has only been slowed by decision-making rather than reduced demand, APAC is improving but still has more work to do, and geopolitical instability is viewed as a tailwind because it supports Defence and migration-related demand.