Serco Group plc (GB:SRP)
LSE:SRP
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Serco Group plc
(LSE:SRP)
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Rating:79Outperform
Price Target:
272.00 p
▼(-10.35% Downside)
Action:Reiterated
Date:03/06/26
The score is driven primarily by strong cash generation and an improved balance-sheet profile, supported by a very low P/E valuation. Technicals are positive with the stock in an uptrend, while earnings-call takeaways are constructive (profit-growth guidance and strong pipeline) but tempered by near-term headwinds (immigration exposure), higher debt/finance costs, and execution/timing risks.
Positive Factors
Cash generation & conversion
Serco's consistently strong operating and free cash flow, with trading cash conversion above 100%, underpins durable earnings quality and funds dividends, buybacks and reinvestment without needing recurring equity. High cash conversion provides resilience through contract timing swings and supports capital allocation discipline.
Negative Factors
Thin margins & earnings volatility
Serco operates with sector-thin margins and has shown material year-to-year profit swings. Thin operating margins make the business sensitive to mobilization costs, contract resets and inflation, while profit volatility reduces predictability of returns and complicates long-term investment planning.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & conversion
Serco's consistently strong operating and free cash flow, with trading cash conversion above 100%, underpins durable earnings quality and funds dividends, buybacks and reinvestment without needing recurring equity. High cash conversion provides resilience through contract timing swings and supports capital allocation discipline.
Read all positive factors
Serco Group plc (SRP) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£2.34B
Dividend Yield1.27%
Average Volume (3M)2.47M
Price to Earnings (P/E)16.3
Beta (1Y)0.74
Revenue Growth1.69%
EPS Growth276.44%
CountryUK
Employees50,000
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.14
Shares Outstanding989,468,570
10 Day Avg. Volume1,983,017
30 Day Avg. Volume2,474,055
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)3.23
Price to Sales (P/S)0.58
P/FCF Ratio6.97
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£315.00Price Target Upside3.82% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)0.19
Revenue Forecast (FY)£5.03B
Serco Group plc Business Overview & Revenue Model
Company Description
Serco Group plc is a global enterprise specializing in the provision of essential public services, operating across the United Kingdom, Europe, North America, the Asia Pacific region, and the Middle East. Its comprehensive portfolio supports vario...
How the Company Makes Money
Serco makes money primarily by delivering outsourced public services under contracts with government and public-sector customers. Revenue is largely contract-based and recognized as services are performed over the contract term, with many arrangem...
Serco Group plc Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial story: headline revenue and profit grew, a record decade-high GBP 12.1bn pipeline and strong order intake (book-to-bill >100%) underpin momentum into 2026. Cash generation, capital returns (dividend + buyback) and successful MT&S integration were notable achievements. Offsetting these positives were region-specific revenue reductions (APAC, Middle East), only modest organic growth (1%), higher net debt following the MT&S acquisition and elevated mobilization/integration costs. Management reiterated guidance for 2026 with revenue around GBP 5.0bn and underlying operating profit around GBP 300m, signaling confidence while acknowledging near-term headwinds in immigration and timing delays in some markets.Positive Updates
Revenue and Profit Growth
Revenue of GBP 4.9 billion, up 3% at constant currency; underlying operating profit GBP 272 million, up 1% at constant currency; margin 5.6% (middle of 5%-6% target range).
Negative Updates
Revenue Declines in APAC and Middle East
Asia Pacific revenue down 18% (12% organic decline plus 5% adverse currency) following the end of the Australian immigration contract and disposal of Hong Kong business; Middle East revenue down 18% driven by contract conclusions and accounting impact of Mubadala JV.
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue and Profit Growth
Revenue of GBP 4.9 billion, up 3% at constant currency; underlying operating profit GBP 272 million, up 1% at constant currency; margin 5.6% (middle of 5%-6% target range).
Read all positive updates
Company Guidance
Serco's 2026 guidance targets revenue of around GBP 5.0 billion (c.3% organic growth), assuming a full‑year contribution from MT&S and contract ramp‑ups offset by an estimated c.3% organic headwind from reduced U.K. and Australian immigration activity; underlying operating profit of about GBP 300 million (>10% above 2025), implying a margin of ~6% (top of the 5–6% medium‑term target); net finance costs of c. GBP 52 million (reflecting MT&S‑funding debt and the new GBP 75 million buyback); free cash flow of c. GBP 160 million (consistent with the medium‑term ambition to convert at least 80% of profit into cash); and adjusted net debt expected to finish 2026 around GBP 165 million (vs. prior pre‑close guidance of GBP 150 million). The guidance is supported by 2025 results of revenue GBP 4.9 billion, underlying operating profit GBP 272 million (5.6% margin), cash conversion 112%, order intake GBP 5.5 billion (book‑to‑bill 114%), and a record GBP 12.1 billion pipeline.Serco Group plc Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.88B | 4.79B | 4.87B | 4.53B | 4.42B |
| Gross Profit | 562.00M | 518.60M | 495.50M | 493.50M | 468.00M |
| EBITDA | 515.60M | 326.90M | 448.90M | 382.00M | 371.50M |
| Net Income | 145.60M | 44.20M | 202.40M | 155.40M | 303.90M |
Balance Sheet | |||||
| Total Assets | 2.80B | 2.66B | 2.61B | 2.75B | 2.73B |
| Cash, Cash Equivalents and Short-Term Investments | 199.30M | 183.00M | 94.40M | 57.20M | 198.40M |
| Total Debt | 909.30M | 806.40M | 659.90M | 708.90M | 807.30M |
| Total Liabilities | 1.92B | 1.82B | 1.58B | 1.72B | 1.73B |
| Stockholders Equity | 873.60M | 842.50M | 1.03B | 1.03B | 1.01B |
Cash Flow | |||||
| Free Cash Flow | 405.60M | 385.00M | 368.40M | 307.80M | 317.80M |
| Operating Cash Flow | 427.10M | 419.40M | 393.10M | 327.20M | 349.90M |
| Investing Cash Flow | -279.50M | -7.40M | -5.40M | -35.30M | -232.30M |
| Financing Cash Flow | -127.80M | -322.30M | -347.90M | -436.80M | -250.10M |
Serco Group plc Technical Analysis
Negative
303.40
Price Trends
271.82
Negative
285.26
Negative
268.57
Negative
Market Momentum
-9.19
Positive
24.76
Positive
11.72
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SRP, the sentiment is Negative. The current price of 303.4 is above the 20-day moving average (MA) of 256.07, above the 50-day MA of 271.82, and above the 200-day MA of 268.57, indicating a bearish trend. The MACD of -9.19 indicates Positive momentum. The RSI at 24.76 is Positive, neither overbought nor oversold. The STOCH value of 11.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SRP.
Serco Group plc Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | £2.34B | 16.25 | 16.69% | 1.27% | 1.69% | 276.44% | |
73 Outperform | £8.91B | 26.06 | 31.07% | 3.44% | 1.13% | 1.73% | |
65 Neutral | £10.78B | 35.58 | 6.51% | 1.68% | -3.59% | 15.83% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | £1.91B | 24.52 | 15.86% | 2.58% | 10.55% | -19.05% | |
54 Neutral | £345.12M | 272.92 | 0.58% | 2.31% | 10.68% | -89.58% | |
45 Neutral | £382.69M | -2.31 | -142.88% | ― | -7.30% | -311.68% |
* Industrials Sector Average
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Serco Group plc Corporate Events
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Continues Share Buyback, Reduces Free Float and Updates Voting Rights
Positive
Jun 19, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing more than 1.5 million ordinary shares between 15 and 19 June 2026 through RBC Europe at prices ranging roughly between 233p and 258p. These purc...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Capital Base with Continued Share Buybacks
Positive
Jun 12, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing around 1.46 million ordinary shares between 8 and 12 June 2026 through RBC Europe at average prices in the mid-250p range. These transactions fo...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Advances Share Buyback, Tightening Free Float and Voting Base
Positive
Jun 5, 2026
Serco Group plc has continued its previously announced share buyback programme, repurchasing 1.48 million ordinary shares between 1 and 5 June 2026 through RBC Europe at average prices around 254 to 258 pence. Since launching the programme in Marc...
Business Operations and StrategyStock Buyback
Serco Tightens Share Base with Ongoing Buyback, Updates Voting Rights
Positive
May 29, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing around 1.06 million ordinary shares between 26 and 29 May 2026 at average prices ranging from roughly 268.8p to 280.1p. The company has accumula...
Business Operations and Strategy
Serco wins £270m, 10-year facilities management renewal at Norfolk and Norwich hospital
Positive
May 26, 2026
Serco Group has retained its facilities management contract at Norfolk and Norwich University Hospital in a renewed agreement worth more than £270 million over 10 years, extending its integrated soft and hard FM service delivery at the site t...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Advances Buyback as Treasury Shares Reach 13.3 Million
Positive
May 22, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing 1,338,154 ordinary shares between 18 and 22 May 2026 through RBC Europe at average prices ranging from about 271p to 278p per share. The transac...
Stock BuybackRegulatory Filings and Compliance
Serco Updates Market on Progress of Share Buyback Programme
Positive
May 15, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing 1,371,302 ordinary shares between 11 and 15 May 2026 via RBC Europe Limited at average prices around 265–270 pence. Following these trans...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Advances Share Buyback, Updates Voting Rights and Treasury Stock
Positive
May 8, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing several tranches of ordinary shares between 1 and 8 May 2026 through broker RBC Europe Limited. Following these latest transactions, the company...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Free Float as Ongoing Buyback Lifts Treasury Stock to 9.2m Shares
Positive
Apr 30, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing just over 1.05 million ordinary shares between 27 and 30 April 2026 at average prices around 278–281 pence via broker RBC Europe across m...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Free Float as Share Buyback Lifts Treasury Stock to 8.2 Million
Positive
Apr 24, 2026
Serco Group plc has continued to execute its share buyback programme, repurchasing just over 1.27 million ordinary shares between 20 and 24 April 2026 at prices mostly in the high-280p to high-290p range through broker RBC Europe. These shares are...
Business Operations and StrategyExecutive/Board ChangesStock BuybackDividendsShareholder Meetings
Serco Shareholders Back All Resolutions at 2026 AGM, Approve Dividend and Board Authorities
Positive
Apr 22, 2026
Serco Group plc reported that all resolutions at its 22 April 2026 annual general meeting in London were approved by shareholders via poll, covering routine business such as receiving the annual report, approving the directors’ remuneration ...
Stock BuybackRegulatory Filings and Compliance
Serco Updates Market on Progress of Share Buyback Programme
Positive
Apr 17, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing just over 1.28 million ordinary shares between 13 and 17 April 2026 via RBC Europe at average prices around 294–299 pence. Since the star...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco updates market on progress of ongoing share buyback programme
Positive
Apr 10, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing a total of 1,003,292 ordinary shares between 7 and 10 April 2026 via RBC Europe Limited at average prices just under 300p. These latest transact...
Executive/Board ChangesRegulatory Filings and Compliance
Serco Discloses Executive Share Award Vesting and Tax-Related Disposals
Neutral
Apr 10, 2026
Serco Group plc has disclosed changes in the shareholdings of senior executives following the vesting of awards granted in 2023 under its Long-Term Incentive Plan and Deferred Bonus Plan. Group Chief Executive Anthony Kirby saw a substantial numbe...
Executive/Board ChangesRegulatory Filings and Compliance
Serco grants long-term share awards to senior executives
Positive
Apr 7, 2026
Serco Group plc has granted Long-Term Incentive Plan share awards over ordinary shares to a number of senior executives, including Group Chief Executive Anthony Kirby and Group Chief Financial Officer Mark Reid, at a reference price of £2.885...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Share Count as Buyback Programme Advances
Positive
Apr 2, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing 267,155 ordinary shares on 1 April and a further 260,000 on 2 April 2026 via RBC Europe at average prices just under 292 pence. These transacti...
Stock BuybackRegulatory Filings and Compliance
Serco Updates Market on Progress of Ongoing Share Buyback
Positive
Mar 31, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing 250,969 ordinary shares on 30 March and 260,000 shares on 31 March 2026 through RBC Europe at average prices just below 290 pence. Since the pr...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Free Float as March Buybacks Lift Treasury Shareholdings
Positive
Mar 27, 2026
Serco Group plc has continued to execute its recently announced share buyback programme, repurchasing 1,256,257 ordinary shares between 23 and 27 March 2026 at prices around 291–306 pence and holding these in treasury. Following these transa...
Executive/Board ChangesRegulatory Filings and Compliance
Serco Grants Equity-Settled Share Award to Chief Executive Anthony Kirby
Positive
Mar 27, 2026
Serco Group plc has granted Group Chief Executive Anthony Kirby an equity-settled bonus plan award over 53,770 ordinary shares at a price of £2.9920 per share, representing a notional value of about £160,880. The award, which is subject ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.