Serco Group PLC (LSE:SRP) climbed to a two-year high as the outsourcing specialist pleased the market with the latest full-year numbers.
Revenues were up 7% at £4.87 billion with operating profits 125% better at £272 million with the icing a new £140 million share buyback on top of an 18% dividend hike.
Broker Shore Capital commented: “Serco has driven growth outside of the UK strongly in recent years, barely 30% of normalised EBIT is generated inside the UK in our estimation, over 50% now comes from North America (the remainder being split between AsiaPac and the Middle East regions).
“The UK does continue to recover its margins, a process we expect to continue; however, we expect growth to be delivered more strongly from other regions in the next few years.”
Shore Cap has a 240p share price target and buy recommendation.
Shares were up 6% at 190p today.