Serco Group (SRP) H2 2025 earnings summary

Executive summary

• Delivered strong full-year 2025 results with revenue of GBP 4.9 billion, underlying operating profit of GBP 272 million, and free cash flow of GBP 219 million, supporting increased shareholder returns.

• Strategic focus sharpened on defense, justice and immigration, and citizen services, with defense now accounting for 40% of revenue and driving robust growth.

• Order intake reached GBP 5.5 billion (book-to-bill 114%), with a record GBP 12.1 billion pipeline.

• High contract retention rate over 90% and new business win rate above 30%.

• Named one of Britain's Most Admired Companies, reflecting strong culture and operational excellence.

Financial highlights

• Revenue up 3% year-over-year to GBP 4.9 billion; organic growth 1%.

• Underlying operating profit at GBP 272 million; margin at 5.6%.

• Free cash flow was GBP 219 million, with cash conversion at 112%.

• Adjusted net debt increased to GBP 206 million due to MT&S acquisition and capital returns; leverage at 0.7x EBITDA.

• Return on invested capital at 26%.

Outlook and guidance

• 2026 revenue expected around GBP 5 billion, organic growth 3%.

• Underlying operating profit guidance of GBP 300 million, margin near 6%.

• Free cash flow forecast at GBP 160 million; adjusted net debt to finish 2026 at GBP 165 million.

• Continued focus on growth in defense, justice and immigration, and citizen services.