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Outsourced services company Serco said it expected to report a more than 50% rise in first-half underlying profit and stuck to its revenue and earnings guidance for the full year.
Underlying trading profit for the six months through June was seen rising to between £120 million and £125 million, amid revenue growth of 19%, Serco said in a trading update.
Full-year underlying trading profit was still expected at around £200 million, up 30% on a constant currency basis, on revenue of around £4.3 billion, in line with previous guidance.
Serco, however, upgraded its annual free cash-flow guidance, which was now expected to come in at around £300 million, up from previous guidance of around £275 million.
'Serco's performance in the first half underlines the trust governments around the world place in us, and our ability to respond at scale and pace to rapidly-changing requirements,' chief executive Rupert Soames said.
'Profits will be weighted to the first half, and will include contributions from the WBB and FFA acquisitions, which will enable us to absorb the impact of the end of the AWE contract, the mobilisation costs of the recently-signed DWP contract and an expected reduction in Covid-19 related activities, Soames said.
'We also intend to take advantage of the current strong trading to temporarily increase our rate of investment in our systems platform, cyber resilience, and business development spend to respond to a strong pipeline of opportunities.'