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Serco Group plc
(LSE:SRP)
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Rating:68Neutral
Price Target:
314.00 p
▲(20.40% Upside)
Action:Reiterated
Date:09/06/26
The score is primarily supported by strong, consistent cash generation and an improved leverage profile. It is tempered by volatile profitability/thin margins and a mixed technical picture (below key moving averages with only neutral momentum), while valuation appears reasonable but not meaningfully cheap.
Positive Factors
Strong Cash Generation
Consistently strong operating and free cash flow, with FCF generally above reported earnings, indicates solid earnings conversion. That cash supports contract delivery, reinvestment and balance-sheet resilience, making the model less reliant on external funding.
Negative Factors
Thin, Volatile Margins
Thin margins leave limited room for execution errors, wage inflation or unfavorable contract resets to be absorbed without affecting earnings. The history of fluctuating operating profit also reduces confidence that revenue growth will consistently translate into stronger profits.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Consistently strong operating and free cash flow, with FCF generally above reported earnings, indicates solid earnings conversion. That cash supports contract delivery, reinvestment and balance-sheet resilience, making the model less reliant on external funding.
Read all positive factors
Serco Group plc (SRP) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£2.78B
Dividend Yield1.6%
Average Volume (3M)1.74M
Price to Earnings (P/E)18.9
Beta (1Y)0.72
Revenue Growth1.20%
EPS Growth221.80%
CountryUK
Employees54,000
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding959,199,900
10 Day Avg. Volume1,507,868
30 Day Avg. Volume1,740,933
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
£360.50Price Target Upside38.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.19
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. It offers service design and advisory, resourcing, programme management, systems integration, case management, engineerin...
How the Company Makes Money
Serco makes money primarily by winning and executing long-term service contracts—mainly with government agencies and public-sector bodies—under which it is paid to operate, manage, and maintain services and facilities. Revenue is generally generat...
Serco Group plc Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
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 | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.99B | 4.88B | 4.79B | 4.87B | 4.53B | 4.42B |
| Gross Profit | 518.50M | 562.00M | 518.60M | 495.50M | 493.50M | 468.00M |
| EBITDA | 529.20M | 515.60M | 326.90M | 448.90M | 381.90M | 371.50M |
| Net Income | 153.00M | 145.60M | 44.20M | 202.40M | 155.40M | 303.90M |
Balance Sheet | ||||||
| Total Assets | 2.86B | 2.80B | 2.66B | 2.61B | 2.75B | 2.73B |
| Cash, Cash Equivalents and Short-Term Investments | 182.20M | 199.30M | 183.00M | 94.40M | 57.20M | 198.40M |
| Total Debt | 905.90M | 909.30M | 806.40M | 659.90M | 708.90M | 807.30M |
| Total Liabilities | 1.99B | 1.92B | 1.82B | 1.58B | 1.72B | 1.73B |
| Stockholders Equity | 869.70M | 873.60M | 842.50M | 1.03B | 1.03B | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | 388.10M | 405.60M | 385.00M | 368.40M | 307.80M | 317.80M |
| Operating Cash Flow | 411.60M | 427.10M | 419.40M | 393.10M | 327.20M | 349.90M |
| Investing Cash Flow | -30.90M | -279.50M | -7.40M | -5.40M | -35.30M | -232.30M |
| Financing Cash Flow | -374.40M | -127.80M | -322.30M | -347.90M | -436.80M | -250.10M |
Serco Group plc Technical Analysis
Positive
260.80
Price Trends
260.94
Positive
250.39
Positive
268.59
Positive
Market Momentum
8.94
Negative
75.03
Negative
81.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SRP, the sentiment is Positive. The current price of 260.8 is below the 20-day moving average (MA) of 270.08, below the 50-day MA of 260.94, and below the 200-day MA of 268.59, indicating a bullish trend. The MACD of 8.94 indicates Negative momentum. The RSI at 75.03 is Negative, neither overbought nor oversold. The STOCH value of 81.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | £2.78B | 18.92 | 17.55% | 1.60% | 1.20% | 221.80% | |
68 Neutral | £9.10B | 28.49 | 29.86% | 2.78% | 3.94% | -8.14% | |
67 Neutral | £2.67B | 32.60 | 15.86% | 2.14% | 10.55% | -19.05% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | £8.72B | 24.59 | 5.82% | 2.71% | -0.18% | 39.04% | |
60 Neutral | £414.31M | 149.29 | 1.30% | 2.32% | 8.11% | -69.68% | |
47 Neutral | £332.98M | -1.66 | -677.10% | 5.94% | -16.13% | -1315.87% |
* Industrials Sector Average
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Serco Group plc Corporate Events
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Expands Treasury Stock as Share Buyback Programme Progresses
Positive
Oct 16, 2026
Serco Group plc has continued to execute its share buyback programme announced in August, repurchasing more than 1.2 million ordinary shares between 12 and 16 October through RBC Europe at prices rising from roughly 255p to above 273p. Following t...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco tightens capital base with ongoing share buybacks
Positive
Oct 9, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, purchasing around 1.45 million ordinary shares between 5 and 9 October 2026 at prices broadly in the 247p–255p range through RBC Europe Limited. The r...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Serco Awards Long-Term Share Incentives to North America CEO
Positive
Oct 5, 2026
Serco Group plc has granted a long-term incentive plan award over 559,145 ordinary shares to North America CEO Barbara Supplee, priced at £2.528 per share and valued at about £1.41 million. The award, which is subject to malus and clawba...
Stock BuybackRegulatory Filings and Compliance
Serco Updates Market on Ongoing Share Buyback and Voting Rights
Positive
Oct 2, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, purchasing 600,000 ordinary shares on 1 and 2 October 2026 via RBC Europe Limited at average prices around 252–255 pence. These shares are held in tre...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Free Float as Buyback Lifts Treasury Shares Above 38.9 Million
Positive
Oct 1, 2026
Serco Group plc has continued execution of its previously announced share buyback programme, repurchasing 866,130 ordinary shares between 28 and 30 September 2026 via RBC Europe Limited at average prices around 251–255 pence. These shares ar...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Tightens Free Float as Share Buyback Programme Progresses
Positive
Sep 25, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing ordinary shares on the market via RBC Europe Limited between 21 and 25 September 2026 at average prices around 253–257 pence. These trans...
Business Operations and StrategyStock Buyback
Serco Tightens Capital Structure With Ongoing Share Buyback
Positive
Sep 18, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing a series of tranches of ordinary shares between 14 and 18 September 2026 through RBC Europe Limited. The purchases, at average prices around 25...
Stock BuybackRegulatory Filings and Compliance
Serco Tightens Share Capital as Buyback Programme Advances
Positive
Sep 11, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing just over 1.7 million ordinary shares between 7 and 11 September 2026 through RBC Europe at average prices around 250 pence. These shares have ...
Executive/Board ChangesRegulatory Filings and Compliance
Serco discloses Long-Term Incentive Plan share sale by senior executive
Neutral
Sep 9, 2026
Serco Group plc has disclosed a share transaction involving Group Chief People and Culture Officer Gillian Duggan, following the vesting of a Long-Term Incentive Plan granted in September 2023. The vesting price was £2.51354 per share and ref...
Business Operations and StrategyStock Buyback
Serco Intensifies Share Buyback, Lifts Treasury Holdings
Positive
Sep 4, 2026
Serco Group plc has continued executing its previously announced share buyback programme, repurchasing ordinary shares through RBC Europe Limited over four trading days in early September. The transactions were conducted at average prices around 2...
Stock BuybackRegulatory Filings and Compliance
Serco Updates Market on Progress of Share Buyback and Voting Rights
Neutral
Aug 28, 2026
Serco Group plc has continued to execute its previously announced share buyback programme, repurchasing 1,578,545 ordinary shares between 24 and 28 August 2026 at average prices around 258–263 pence per share via broker RBC Europe. Since lau...
Stock BuybackRegulatory Filings and Compliance
Serco Advances Buyback, Lifts Treasury Stock to 2.3 Million Shares
Positive
Aug 21, 2026
Serco Group plc has continued to execute its recently announced share buyback programme, repurchasing 1,476,584 ordinary shares between 17 and 21 August 2026 at average prices ranging from about 258p to 265p per share through RBC Europe Limited. T...
Stock BuybackRegulatory Filings and Compliance
Serco updates market on progress of August share buyback
Positive
Aug 14, 2026
Serco Group plc has been buying back its own ordinary shares under a previously announced share repurchase programme, executing purchases through RBC Europe Limited over several trading days in August 2026. The company has acquired 805,875 shares ...
Business Operations and StrategyStock Buyback
Serco launches £75m share buyback managed by RBC Europe
Positive
Aug 11, 2026
Serco Group plc has launched a share repurchase programme of up to £75 million, following guidance given with its 2026 half-year results. The buyback will run from 11 August 2026 until no later than 31 December 2026, and any shares bought bac...
Business Operations and StrategyExecutive/Board Changes
Serco strengthens board with appointment of Carol Borg as Risk Committee Chair designate
Positive
Aug 6, 2026
Serco Group has appointed Carol Borg as an Independent Non-Executive Director and Risk Committee Chair designate, effective 1 December 2026, marking the first of three planned new non-executive appointments to support the company’s next phas...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Serco lifts buyback to £150m as defence-led growth boosts first-half margins
Positive
Aug 6, 2026
Serco Group plc reported a 4% rise in first-half revenue to £2.5bn and a 9% increase in underlying operating profit to £157m at constant currency, driven by 10% organic growth in its Defence business and a higher-margin mix. The company ...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Serco Updates Share Buyback Activity and Voting Rights
Neutral
Jul 31, 2026
Serco Group plc has continued to execute its share buyback programme, repurchasing more than 1.49 million ordinary shares between 27 and 31 July 2026 through RBC Europe at average prices around 240 to 244 pence. These purchases form part of a broa...
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.