Serco Group PLC (LSE:SRP) shares rose 7% in early trading on Thursday after the outsourcing group secured three contracts worth more than £1 billion to support the Royal Navy. The latest awards add momentum to a growing list of defence-related wins.
The largest of the new deals is an £850 million contract over ten years to provide marine services at key naval bases including Portsmouth, Devonport and Faslane.
This covers vessel towing, crew transport and barge cleaning, and includes the procurement of 24 new support vessels for the Ministry of Defence. Serco also won a £70 million contract for inshore military training support and a £110 million deal for offshore training operations.
The contracts are worth around a quarter of the contractor's existing defence revenues.
Peel Hunt said the awards further cement Serco’s position in the sector but made no changes to its forecasts. Its price target for the shares remains 202p.
These latest wins follow a £1 billion contract to run armed forces recruitment in the UK and multimillion-dollar deals with the US Army.
Investors appear to welcome Serco’s continued pivot towards more specialised, higher-margin services. Shares are now edging closer to Peel Hunt’s target, reflecting growing confidence in the group’s long-term strategy.
The shares rose 11.65p to 186.65p.