(Adds details, quote, share price)
LONDON Dec 1 Britain's Serco reiterated
its forecasts for the rest of this year and next, avoiding the
turmoil hitting the wider outsourcing sector, helped by a
long-term turnaround programme.
Serco, which provides security, traffic, defence and
education services for governments across the world, said it had
continued to trade in line with the improved outlook given in
August, avoiding the problems that have recently hit sector
peers Capita and Mitie.
For 2016 Serco expects to report an underlying trading
profit of not less than 80 million pounds. For 2017 it expects
to report a dip, with profit coming in between 65 million pounds
and 70 million pounds, although it cautioned that the range of
outcomes was significantly wider than normal.
"Our view of the underlying outlook for 2017 remains
unchanged, which means that we are continuing to make good
progress with the execution of our strategy for the long-term
turnaround of Serco," CEO Rupert Soames said ahead of a capital
markets day on Thursday.
Serco, which is in the middle of a turnaround programme
after years of setbacks, said it expected to move into a
"growth" phase at some point in 2018.
The whole outsourcing sector has been hit in recent months
by warnings from Capita and Mitie which both reported that
trading had slowed due to client indecision following the vote
to leave the European Union.
Shares in Serco, which have risen 24 percent over the last
six months outperforming Britain's midcap index which traded 3
percent higher in the period, opened up 0.9 percent at 134.4
($1 = 0.7974 pounds)
(Reporting by Kate Holton; editing by Sarah Young)