Serco Group plc (GB:SRP)
LSE:SRP
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Serco Group plc
(LSE:SRP)
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Rating:79Outperform
Price Target:
313.00 p
▲(3.16% Upside)
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
Consistent, high cash conversion and strong free cash flow create durable self-funding. This supports reinvestment, disciplined buybacks/dividends and accelerated debt reduction, giving the company flexibility to absorb mobilization timing, bid for new contracts and sustain operations through contract cycles.
Negative Factors
Immigration exposure / APAC decline
Material exposure to immigration-related contracts creates structural sensitivity to policy shifts and contract terminations. The 18% APAC revenue decline shows how quickly volumes can drop, reducing organic growth visibility and forcing reliance on portfolio rebalancing to replace lost revenue.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistent, high cash conversion and strong free cash flow create durable self-funding. This supports reinvestment, disciplined buybacks/dividends and accelerated debt reduction, giving the company flexibility to absorb mobilization timing, bid for new contracts and sustain operations through contract cycles.
Read all positive factors
Serco Group plc (SRP) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£2.64B
Dividend Yield1.27%
Average Volume (3M)2.47M
Price to Earnings (P/E)12.3
Beta (1Y)0.70
Revenue Growth1.69%
EPS Growth276.44%
CountryUK
Employees50,000
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding990,806,700
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)0.57
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
£351.00Price Target Upside15.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.18
Revenue Forecast (FY)£5.05B
Serco Group plc Business Overview & Revenue Model
Company Description
Serco Group plc provides public services in the United Kingdom, Europe, North America, the Asia Pacific, and the Middle East. The company offers base and operational support engineering, and management and information, as well as nuclear, space, a...
How the Company Makes Money
Serco primarily makes money by winning, operating, and renewing multi-year service contracts with government and public-sector customers. Revenue is generated from delivering contracted services—often business-process outsourcing and on-the-ground...
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 | 4.95B | 4.79B | 4.87B | 4.53B | 4.42B |
| Gross Profit | 562.00M | 518.60M | 495.50M | 493.50M | 468.00M |
| EBITDA | 292.00M | 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
Neutral
303.40
Price Trends
291.32
Negative
291.56
Negative
263.81
Positive
Market Momentum
-6.33
Positive
40.98
Neutral
37.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SRP, the sentiment is Neutral. The current price of 303.4 is above the 20-day moving average (MA) of 277.98, above the 50-day MA of 291.32, and above the 200-day MA of 263.81, indicating a neutral trend. The MACD of -6.33 indicates Positive momentum. The RSI at 40.98 is Neutral, neither overbought nor oversold. The STOCH value of 37.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | £2.64B | 12.29 | 16.69% | 1.27% | 1.69% | 276.44% | |
76 Outperform | £2.18B | 13.52 | 20.41% | 2.58% | 11.42% | -17.18% | |
73 Outperform | £8.62B | 9.61 | 31.07% | 3.44% | 1.13% | 1.73% | |
65 Neutral | £11.88B | 13.41 | 6.51% | 1.68% | -3.59% | 15.83% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | £358.31M | -45.29 | 0.58% | 2.31% | 10.68% | -89.58% | |
41 Neutral | £377.30M | -0.78 | -142.88% | ― | -7.30% | -311.68% |
* Industrials Sector Average
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Serco Group plc Corporate Events
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 ...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Reduces Free Float With Ongoing Share Buyback Programme
Positive
Mar 20, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing 1,177,454 ordinary shares between 16 and 20 March 2026 at prices mostly in the low- to mid-310 pence range through broker RBC Europe Limited. Th...
Financial DisclosuresRegulatory Filings and ComplianceShareholder Meetings
Serco Publishes 2025 Annual Report and Sets Date for 2026 AGM
Neutral
Mar 18, 2026
Serco Group plc, a major contractor to governments across defence, space, migration, justice, healthcare, mobility, and citizen services, underpins its global operations with service design, programme management, systems integration, and facilitie...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Updates Market on Progress of Share Buyback and Voting Rights
Positive
Mar 13, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing 240,000 ordinary shares on 12 March 2026 and 229,933 shares on 13 March 2026 at average prices just above 320 pence. Following these transactio...
Stock BuybackRegulatory Filings and Compliance
Serco Updates Market on Progress of Share Buyback and Revised Voting Rights
Positive
Mar 11, 2026
Serco Group plc has continued to execute its recently announced share buyback programme, repurchasing 685,703 ordinary shares between 9 and 11 March 2026 at prices around 314–318 pence per share through RBC Europe Limited. The repurchased sh...
Stock Buyback
Serco launches up to £75m share buyback managed by RBC
Positive
Mar 5, 2026
Serco Group plc has launched a share repurchase programme of up to £75 million, to run from 9 March to no later than 31 July 2026, using remaining authority granted at its 2025 AGM. The company plans to transfer any repurchased shares into tr...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Serco lifts order book and launches new £75m buyback as 2025 results underpin 2026 growth plan
Positive
Mar 5, 2026
Serco reported 2025 revenue of £4.9bn, up 3% at constant currency, with underlying operating profit of £272m and a margin of 5.6%, while strong free cash flow of £219m and trading cash conversion of 112% underpinned a solid balance ...
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.