olivLaw · European equity research
Serco Group plc SRP.L
United Kingdom · London Stock Exchange · ISIN GB0007973794 · Vertical: Listed companies from United Kingdom
Serco Group is a British provider of public services that works mostly on the assets and sites of government clients, with revenue of 4876.8 million GBP in 2025. The company focuses on growing its business-to-government segment, especially in defence and citizen services, as climate and procurement rules change.
At the close of 05 Nov 2026, Serco Group plc (SRP.L) stock was 2.84 GBP (−0.42% on the day), with market capitalisation 2.9 bn GBP, P/E 20.2 on diluted EPS of 0.14 GBP over the last 12 months, beta 0.37, 52-week range 2.19–3.25 GBP.
Data as of · AI analysis dated · Source: ESEF annual reports and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 61.3
- strong (55–70)
- Bollinger (20, 2)
- 2.54 – 3.01
- in the upper half of the band · %B 0.64 · band width 16.7%
- SMA 50 / 200
- 2.63 / 2.71
- mixed trend
- MACD (12, 26, 9)
- 0.08 / 0.08
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | EURO STOXX 50 | vs EURO STOXX 50 | Vertical median | |
|---|---|---|---|---|
| 1 month | +13.7% | −0.6% | +14.3 pp | — |
| 3 months | +9.2% | −4.2% | +13.4 pp | — |
| 6 months | +3.3% | +4.3% | −1.0 pp | — |
| Year to date | +1.7% | +7.5% | −5.8 pp | — |
| 1 year | +11.7% | +9.9% | +1.8 pp | +5.8% |
| 3 years | +96.1% | +49.8% | +46.3 pp | +26.3% |
| 5 years | +119.6% | +42.8% | +76.8 pp | — |
Price returns, dividends excluded.
Quarterly results
ESEF annual reports carry no quarters: the results are annual (below).
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 67 percentile of its own 3-quarter history (min 9.0, median 19.8, max 36.9; quarters with earnings only).
Fiscal years
| Fiscal year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 4.9 bn | 4.8 bn | 4.9 bn |
| Revenue YoY | unavailable | −1.8% | +1.9% |
| Net income | 202.4 m | 44.2 m | 145.6 m |
| Net income YoY | unavailable | −78.2% | +229.4% |
| Diluted EPS | 0.18 | 0.04 | 0.14 |
| Diluted EPS YoY | unavailable | −77.1% | +243.2% |
| net % | 4.2% | 0.9% | 3.0% |
| Free cash flow | 377.2 m | 394.1 m | 425.2 m |
Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 199.3 m GBP
- Financial debt
- 404.9 m GBP
- Net debt
- 205.6 m GBP
- Equity
- 873.6 m GBP
- Total assets
- 2.8 bn GBP
- Debt / equity
- 0.46x
- Current ratio
- 0.93x
- ROE
- 17.0%
- ROA
- 5.3%
- FCF margin
- 8.7%
Financial statements (source on every figure)
Revenue and net income (GBP)
Margins
Income statement · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Revenue | 4.9 bn | 4.8 bn | 4.9 bn | esef· 18 Mar 2026verified |
| Cost of revenue | 4.4 bn | 4.3 bn | 4.4 bn | esef· 18 Mar 2026verified |
| Gross profit | 495.5 m | 518.6 m | 512.8 m | esef· 18 Mar 2026verified |
| Operating income | 271.6 m | 130.1 m | 246.3 m | esef· 18 Mar 2026verified |
| Interest expense | 31.6 m | 40.8 m | 51.6 m | esef· 18 Mar 2026verified |
| Pre-tax income | 247.0 m | 97.0 m | 201.5 m | esef· 18 Mar 2026verified |
| Income tax | 44.6 m | 52.5 m | 55.9 m | esef· 18 Mar 2026verified |
| Net income | 202.4 m | 44.2 m | 145.6 m | esef· 18 Mar 2026verified |
| Diluted EPS | 0.18 | 0.04 | 0.14 | esef· 18 Mar 2026verified |
Balance sheet · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Cash | 94.4 m | 183.0 m | 199.3 m | esef· 18 Mar 2026verified |
| Receivables | 329.0 m | 331.5 m | 330.1 m | esef· 18 Mar 2026verified |
| Inventories | 24.1 m | 24.1 m | 20.0 m | esef· 18 Mar 2026verified |
| Current assets | 782.8 m | 864.6 m | 886.8 m | esef· 18 Mar 2026verified |
| Property, plant & equipment, net | 44.3 m | 56.8 m | — | esef· 17 Apr 2025verified |
| Goodwill | 906.7 m | 826.2 m | 929.3 m | esef· 18 Mar 2026verified |
| Intangibles (excl. goodwill) | 115.6 m | 101.4 m | 162.2 m | esef· 18 Mar 2026verified |
| Total assets | 2.6 bn | 2.7 bn | 2.8 bn | esef· 18 Mar 2026verified |
| Accounts payable | 558.0 m | 595.0 m | 562.6 m | esef· 18 Mar 2026verified |
| Short-term debt | 51.0 m | 38.8 m | 0 | esef· 18 Mar 2026verified |
| Long-term debt | 155.2 m | 237.6 m | 404.9 m | esef· 18 Mar 2026verified |
| Current liabilities | 897.8 m | 991.0 m | 952.2 m | esef· 18 Mar 2026verified |
| Total liabilities | 1.6 bn | 1.8 bn | 1.9 bn | esef· 18 Mar 2026verified |
| Equity | 1.0 bn | 842.5 m | 873.6 m | esef· 18 Mar 2026verified |
| Shares outstanding at year end | 1.1 bn | 1.1 bn | 1.0 bn | esef· 18 Mar 2026derived |
Cash flow · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Operating cash flow | 393.1 m | 419.4 m | 446.7 m | esef· 18 Mar 2026verified |
| Capex | 15.9 m | 25.3 m | 21.5 m | esef· 18 Mar 2026verified |
| Free cash flow | 377.2 m ≈ | 394.1 m ≈ | 425.2 m ≈ | esef· 18 Mar 2026derived |
| Investing cash flow | -5.4 m | -7.4 m | -250.9 m | esef· 18 Mar 2026verified |
| Financing cash flow | -347.9 m | -322.3 m | -176.0 m | esef· 18 Mar 2026verified |
| Share repurchases | 88.8 m | 141.3 m | 50.3 m | esef· 18 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
- score weight coverage: 58.3% of at least 60%
A scoring methodology on indicators and valuation, not investment advice.
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 2.9 bn GBP
Key indicators
Coverage and freshness
Score by group
58% · Insufficient data
Estimated value range
unavailable — no valuation assumptions for the reporting currency
Valuation assumptions are editorial choices, not measured; beta is not measured.
Valuation methods
Assumptions (illustrative, editorial)
- Risk-free rate
- 6.5%
- Equity risk premium
- 6.0%
- Beta (default)
- 1.00
- Cost of equity
- 12.5%
- Terminal growth
- 3.0%
Factor scorecard
Insufficient data
Minimum-evidence gate: score weight coverage: 58.3% of at least 60%
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 17.7% | 71 (vs peers) | 18% |
| Net margin · Quality | 3.0% | 31 (vs peers) | 11% |
| FCF conversion · Quality | 292.0% | 100 (on a fixed band) | 11% |
| Revenue CAGR 3Y · Growth | unavailable | unavailable | — |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | 4.8x | 50 (on a fixed band) | 11% |
| Current ratio · Balance sheet | 0.9x | 11 (on a fixed band) | 7% |
| P/E (TTM) · Valuation | 20.2x | 28 (vs peers) | 18% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 14.8% | 100 (on a fixed band) | 14% |
| Shareholder yield (distributions) · Returns | 1.7% | 25 (on a fixed band) | 11% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet35/100 · 2/3 factors with a value
- Growth· partialunavailable · 0/2 factors with a value
- Quality68/100 · 3/3 factors with a value
- Returns· partial25/100 · 1/2 factors with a value
- Valuation60/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
SERCO GROUP PLC (SRP.L). Latest full fiscal year: 2025; data up to 2025-12-31.
Figures computed from the financial statements: revenue 4.9 bn GBP in 2025; YoY growth 1.9%; net margin 3.0%; ROE 17.0%.
The estimated value range is 2.98–4.27 GBP per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 3.56 GBP, the price of 2.84 GBP leaves a potential of 25.3% (value / price − 1) and a margin of safety of 20.2% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
Insufficient data for a verdict (score weight coverage: 58.3% of at least 60%).
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 17.7%
- FCF conversion: 292.0%
- FCF yield: 14.8%
- The price is below the estimated value range
What contradicts it
- Current ratio: 0.9x
- P/E (TTM): 20.2x
- Shareholder yield (distributions): 1.7%
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Revenue CAGR 3Y, EPS CAGR 3Y, Net debt / EBITDA, EV/EBITDA, Payout ratio (FCF).
Versus the vertical median
Listed companies from United Kingdom · same country · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| BATS.LBritish American Tobacco P.L.C. | 104.3 bn | 13.5 | 16.5% | 30.3% | −1.0% | +7% / +88% |
| ABF.LAssociated British Foods PLC | 14.7 bn | 14.3 | 9.2% | 5.3% | −3.1% | −5% / −15% |
| 0EV1.LCarnival PLC | 5.5 bn | 4.1 | 46.7% | 13.4% | +6.4% | unavailable / unavailable |
| BAB.LBabcock International Group PLC | 5.1 bn | 24.7 | 34.7% | 4.1% | +7.2% | −10% / +158% |
| AUTO.LAutotrader Group PLC | 4.8 bn | 16.4 | 60.2% | 47.1% | +3.9% | −13% / −23% |
| BBY.LBalfour Beatty PLC | 4.2 bn | 16.3 | 23.2% | 2.8% | +15.2% | +20% / +160% |
| ABDN.LAberdeen Group PLC | 4.1 bn | 10.8 | 8.0% | 28.9% | −2.1% | +11% / +41% |
| BKG.LThe Berkeley Group Holdings PLC | 3.6 bn | 11.3 | 8.8% | 13.4% | −4.2% | −0% / −22% |
| SRP.LSerco Group PLC | 2.9 bn | 20.2 | 17.0% | 3.0% | +1.9% | +11% / +82% |
| BME.LB&M European Value Retail PLC | 2.9 bn | 17.4 | 21.2% | 2.8% | +3.7% | +68% / −51% |
| AJB.LAj Bell PLC | 2.4 bn | 22.8 | 49.9% | 33.1% | +18.0% | +8% / +128% |
| ASHM.LAshmore Group PLC | 1.4 bn | 13.9 | 13.1% | 71.6% | −0.1% | +28% / +18% |
| BCG.LBaltic Classifieds Group PLC | 1.2 bn | 23.2 | 15.8% | 57.6% | +6.9% | −99% / −99% |
| APN.LApplied Nutrition PLC | 763.6 m | 36.2 | 41.2% | 19.7% | +24.2% | +71% / unavailable |
| BAG.LA.G. Barr P.L.C. | 671.9 m | 14.4 | 14.4% | 10.8% | +4.0% | −7% / +26% |
| ASC.LAsos PLC | 494.5 m | — | -81.3% | -12.0% | −14.7% | +71% / +8% |
| ALFA.LAlfa Financial Software Holdings PLC | 486.8 m | 16.3 | 61.5% | 23.8% | +15.3% | −28% / +10% |
| AML.LAston Martin Lagonda Global Holdings PLC | 344.3 m | — | -93.4% | -39.2% | −20.6% | −45% / −85% |
| APTD.LAptitude Software Group PLC | 111.3 m | 28.5 | 7.2% | 6.2% | −7.3% | −30% / −23% |
| AMGO.LAmigo Holdings PLC | 9.9 m | — | — | — | −81.9% | +325% / +844% |
| ASBE.LAssociated British Engineering PLC | 605.3 k | — | -19.1% | — | unavailable | unavailable / unavailable |
| AMIF.LAmicorp Fs (uk) PLC | 221.6 k | 0.1 | 27.5% | 9.1% | +8.1% | unavailable / unavailable |
| AAF.LAirtel Africa PLC | — | — | 24.1% | 10.6% | +29.5% | −7% / +164% |
| AAL.LAnglo American PLC | — | — | -19.3% | -20.2% | +4.5% | +30% / +76% |
| ACG.LAcg Metals Limited | — | — | -80.3% | -32.0% | +134.8% | +60% / +63% |
1- and 3-year price returns: for SRP.L from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (GBP)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 1.67 Total return -41% · Per year -41% | 2.96 Total return 4% · Per year 4% | 4.46 Total return 57% · Per year 57% |
| 3 years | 1.54 Total return -46% · Per year -19% | 3.07 Total return 8% · Per year 3% | 5.09 Total return 79% · Per year 21% |
| 5 years | 1.41 Total return -50% · Per year -13% | 3.18 Total return 12% · Per year 2% | 5.82 Total return 105% · Per year 15% |
- Exit P/E± 0.77
- Net margin± 0.54
- Annual revenue growth± 0.45
- Annual dilution± 0.05
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Serco Group is a British provider of public services that works mostly on the assets and sites of government clients, with revenue of 4876.8 million GBP in 2025. The company focuses on growing its business-to-government segment, especially in defence and citizen services, as climate and procurement rules change.1
SWOT
Strengths
- Geographically and sector-diversified portfolio, with medium-term contracts that give visibility over revenue.
- High renewal and new-contract win rates in the US defence sector, according to the annual report.
- Asset-light operating model that limits the need for investment in owned infrastructure.
Weaknesses
- Relatively low margins compared with some other service segments, and mobilisation costs can weigh on short-term profitability.
- Heavy reliance on government contracts whose duration and volume can be changed by political decisions.
- Declining revenue in Asia Pacific and Middle East, where activity reduction has not been offset.
Opportunities
- Rising defence budgets could open new contracts, especially in North America.
- Decarbonisation and sustainability services could become an additional profit source if recognised under green taxonomies.
- A growing bid pipeline offers room to expand in existing markets.
Threats
- Climate policy and carbon pricing could raise supply chain costs, and passing them on to customers is not assured.
- Intense competition in government tenders can put pressure on prices and margins.
- Government shutdowns and award delays can postpone expected revenue.
Risks
- Climate policymedium
Changes in US or other government climate policy could affect progress on Net Zero targets and operating costs.
- Dependence on public contractshigh
Revenue depends on government decisions, and losing a few large contracts could materially affect group results.
- Extreme weathermedium
Severe weather could interrupt activity at some sites and create losses not fully covered by insurance.
- Contract executionmedium
Mobilising new contracts and integrating acquisitions can create unforeseen costs and compress margins.
- Currency exposurelow
Exchange rate movements have affected reported revenue and profit, particularly in North America.
Investment thesis
What would need to be true (bull case)
- If defence budgets stay high, the North American division could keep growing and improve margins as new contracts mature.
- A bid pipeline that has nearly doubled suggests a solid base for future orders, if win rates hold.
- The model of medium-term contracts and customer-owned assets could limit investment needs and support cash conversion.
What would break the thesis
- If revenue in Asia Pacific and Middle East keeps falling, the group could remain dependent on a few divisions for growth.
- Operating margins below 6% leave little room to absorb unexpected costs such as carbon-related or mobilisation expenses.
- Government delays and price pressure in tenders could postpone or reduce expected revenue growth.
What to watch
- Margin trend in North America after mobilisation of new contracts2026
- Conversion of the 5 billion GBP North American pipeline into new contractsnext 10-K
- Impact of climate policy on supply chain costs2027
- Return to revenue growth in Asia Pacific and Middle EastQ1 2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
Serco Group plc operates through four geographic divisions: North America, UK & Europe, Asia Pacific and Middle East. Its model rests on contracts averaging about five years in length, and most work takes place directly on customer sites and assets.1
According to the 2025 annual report, the group's underlying operating profit margin was 5.6%, slightly below the 2024 level. The company states a medium-term aim of revenue growth of about 4–6% per year, with margins of 5–6%.1
The group notes that part of its profit is recognised through joint ventures and associates, whose contribution is included in underlying operating profit but not in revenue. This structure means reported revenue does not fully reflect the scale of activity.1
Segments
North America
The North American division generated revenue of 1463.2 million GBP in 2025, with organic growth of 4% and a contribution from the MT&S acquisition. Defence remains the priority sector, while margin fell to 9.8% because some contracts were in early mobilisation.1
UK & Europe
The largest division, with revenue of 2582.1 million GBP in 2025, benefited from the mobilisation of major defence and citizen services contracts. Order intake of 3.7 billion GBP carried a book-to-bill of 145%, and margin held at 5.8%.1
Asia Pacific and Middle East
Asia Pacific revenue fell to 654.6 million GBP and Middle East revenue to 176.9 million GBP, both reflecting lower activity than in the prior year. These regions carry a smaller share of group profit.1
Market context
Serco operates in the market for government-funded public services, where defence and civil demand is supported by public budgets. The company notes that the US defence market is the largest in the world, which creates long-term opportunities for its North American division.1
Dependence on public sector spending means results depend on procurement timing and government decisions, and delays in contract awards can affect short-term orders. The pipeline of bids due for decision within 24 months has risen markedly since the end of 2024.1
Trends
- Rising defence demandtailwind
Defence budgets and military modernisation commitments support demand for contracted services, especially in North America and the UK.
- Climate policy and carbon pricingheadwind
Carbon pricing and climate regulation could raise costs in the supply chain, and the company cannot fully predict how these costs will pass through to customers.
- Pace of public procurementmixed
Government delays in awarding contracts can postpone new orders, although renewal and extension decisions have remained strong.
- Extreme weather eventsheadwind
More frequent extreme weather could disrupt operations at some sites, although the impact has so far been limited.
Competitive position
Serco competes with other public services and defence providers that bid for the same government contracts. The company reports a strong position in the US defence sector, where its win rates for new and renewed contracts have been high.1
Geographic and market diversification is presented as a resilience advantage, but competition for large contracts can limit margins, particularly during mobilisation phases.1
- LeidosLDOS
US defence and technology services provider active in the same government contract categories.
- CACI InternationalCACI
US services and technology company for government and defence, competing in IT and infrastructure bids.
- Booz Allen HamiltonBAH
US consulting and services firm serving defence and federal agencies.
- G4S
International provider of security and facilities management services, present in justice and public security.
News & filings
In the press
No news in our archive over the last 180 days.
Annual reports (ESEF)
- Annual report 202518 Mar 2026
- Annual report 202417 Apr 2025
Sources
- [1] Annual report, fiscal year ended 2025-12-31 (ESEF) · SEC / Serco Group plc · 31 Dec 2025
Figures computed by olivLaw from ESEF annual reports and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.