Serco forecasts higher 2024 profit on immigration demand
LONDON, UNITED KINGDOM — Outsourcing company Serco Group forecasts higher profits in 2024, citing expected growth in its immigration services business and contributions from recent acquisitions.
Serco predicted its 2023 revenue to reach at least £4.8 billion (US$6.09 billion), up 7% year-over-year with 4% organic growth. It also expects its 2023 operating profit to rise 3% to £245 million (US$311 million).
The company highlighted strong demand trends in immigration and defense services, which offset an expected decline in pandemic-related work. Serco was the UK government’s major COVID-19 testing and tracing service provider.
For 2024, Serco projected a further 6% increase in operating profit to around £260 million (US$330 million) despite minimal revenue growth. It cited its recent purchases, including European Homecare, a Germany-based specialist in immigration services acquired for €40 million (US$43.6 million). Serco said the deal expands its European immigration services footprint.
In 2022, Serco bought Swiss firm ORS to bolster its immigration services portfolio. It sees immigration as an attractive growth area, given the increase in government outsourcing. The company also purchased UAE-based Climatize, boosting its sustainability consulting capabilities.
Over the medium term, Serco targets average annual revenue growth of 4-6%. It expects profits to rise faster than revenues based on operating leverage and an improving business mix.
