Serco Group PLC on Thursday reiterated that it expected underlying operating profit to grow as it announced the acquisition of a company.
The Hampshire-based outsourcer said it expects underlying operating profit of £245 million for 2023. For 2022, the firm had reported an underlying trading profit of £237.0 million.
Revenue for 2023 is anticipated to climb 5.9% to £4.8 billion from £4.53 billion. All guidance except for free cash flow for 2023 is unchanged from a prior guidance. Serco expects £170 million of free cash flow at the end of 2023, up from a previous guidance of £150 million and 6.9% higher than £159.1 million at the end of 2022.
For 2024, Serco expects underlying operating profit to grow further, to around £260 million. The company for 2024 also expects revenue of around £4.8 billion.
Chief Executive Officer Mark Irwin said: ‘For 2023, we will deliver growth in revenue, profit and cash, as well as an improvement in colleague safety and strengthened operational delivery of services to our customers.’
Further, Serco said it agreed to acquire European Homecare, a provider of immigration services to public sector customers in Germany. The business is to be acquired from Korte-Stiftung for €40 million.
In 2023, EHC expects to report revenue of around €150 million.
Serco said the acquisition will increase the reach and capability of Serco’s international immigration services platform which has substantial operations in the UK, Australia and Europe.
CEO Irwin said: ‘There are complex and growing requirements for immigration and asylum seeker support services globally and we have a strong track record of providing high standards of service underpinned by our commitment to ensuring that service users are treated with care and respect. Increasing our presence in Germany will expand the immigration support we already provide to government customers in the UK, Australia and across Europe.’
Serco shares rose 4.3% to 162.20 pence on Thursday morning in London.
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