Serco up on strong outlook and European acquisition

Serco Group shares (LSE: SRP) rose 4.1% on Thursday morning after the public services provider predicted higher profits and revenue for 2023 and 2024. It also announced the €40 million acquisition of European Homecare, a provider of immigration services to the German public sector.

For 2023, Serco expects underlying operating profit to increase to £245 million from £237 million in 2022. It also guided for 5.9% revenue growth to £4.8 billion and lifted its free cash flow forecast to £170 million. The company predicts further profit growth in 2024 to around £260 million, with revenue remaining steady at around £4.8 billion.

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Chief Executive Mark Irwin said the deal for European Homecare would “increase the reach and capability” of Serco’s international immigration services. He highlighted the “complex and growing requirements for immigration and asylum seeker support services globally”.

Serco shares have climbed 3.5% so far this year on the back of the upbeat outlook.