(RTTNews) - Serco Group Plc (SRP.L), a provider of services to governments, announced Thursday that it expects fiscal 2020 underlying trading profit or UTP to grow by around 35 percent to 160 million pounds to 165 million pounds, consistent with previous guidance. The margin is expected to increase by around 40 basis points to slightly above 4 percent.
Further, revenue for the year is expected to grow by 19 percent to 3.9 billion pounds, with organic growth of 16 percent.
Looking ahead for fiscal 2021, the company expects revenue and UTP to be slightly higher than 2020, reflecting a similar performance for the existing business and a small increase from the acquisition of Facilities First in Australia.
Serco announced that it has reached a deal, through its Australian subsidiary, Serco Group Pty Ltd., to acquire Facilities First Australia Holdings Pty Limited or FFA for an enterprise value of A$76.5 million or 43 million pounds.
The acquisition has received Australian Foreign Investment Review Board approval and is expected to complete on 4 January 2021.
Separately, the company announced the appointment of Nigel Crossley as Group Chief Financial Officer and a Board member at the AGM in April 2021.
Crossley, currently Group Director of Finance, succeeds Angus Cockburn, who is retiring from full-time executive life on the same date. Cockburn has served 21 years as a public-company CFO, six of them at Serco. Cockburn now plans to focus on further developing his non-executive portfolio.
Crossley has worked for Serco since 2014. Prior to joining Serco, Nigel held senior finance roles at EMI, RHM plc and Procter & Gamble.
Serco also announced that it has won rebid at Acacia prison in Western Australia worth up to 790 million pounds. Serco, through its Australian subsidiary, has signed a contract to deliver prison services at Acacia Prison for the Government of Western Australia for up to 15 years.
The initial 5-year period has an estimated value of A$445 million or around 250 million pounds. The contract has provision for two further 5-year extensions with potential value to Serco over the full 15 years, including indexation, of approximately A$1.4 billion or 790 million pounds.
The new contract will commence in May 2021, and transition will start immediately.
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