LONDON -- The shares of Serco (LSE: SRP ) (NASDAQOTH: SECCY ) were flat at 633 pence yesterday morning after the international services group said it expects to see a modest improvement on last year's 4% growth in revenue.
Serco -- which operates over 700 outsourcing contracts around the world -- claimed it was on track for "strong organic revenue growth" in the first half of 2013, driven by last year's record number of new deals.
The company confirmed it had secured new business worth 900 million pounds since the start of the year, including an extension of its contract to operate London's Docklands Light Railway.
Chief executive Christopher Hyman said:
We have begun 2013 with many important new contracts under way and have achieved a good operational performance across our activities around the world. Our global BPO business and AMEAA division are delivering further excellent organic revenue growth.
We are developing new opportunities in the Americas division, though challenging conditions remain in the U.S. federal contracting market. Meanwhile in the U.K., markets continue to show more encouraging signs. We are therefore confident of Serco's portfolio achieving another year of good progress.
With a market cap of 3.1 billion pounds, Serco is valued at 14 times its expected earnings. Having increased its dividend for over 20 consecutive years, Serco offers a prospective yield of 1.8%.
Of course, whether that valuation and the prospects for the outsourcing industry combine to make Serco a "buy" is something only you can decide.
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