OTCPK:SECC.F

Stock Analysis Report

Executive Summary

Serco Group plc provides public services in the United Kingdom, Europe, North America, the Asia Pacific, and the Middle East.


Snowflake Analysis

Reasonable growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has Serco Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SECC.F's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

24.2%

SECC.F

-0.6%

US Commercial Services

2.4%

US Market


1 Year Return

-6.7%

SECC.F

-17.0%

US Commercial Services

-10.0%

US Market

Return vs Industry: SECC.F exceeded the US Commercial Services industry which returned -17% over the past year.

Return vs Market: SECC.F exceeded the US Market which returned -10% over the past year.


Shareholder returns

SECC.FIndustryMarket
7 Day24.2%-0.6%2.4%
30 Day-22.8%-22.9%-11.0%
90 Dayn/a-25.8%-19.4%
1 Year-6.7%-6.7%-14.1%-17.0%-8.1%-10.0%
3 Year6.2%6.2%14.5%7.1%17.3%9.6%
5 Year-23.0%-23.0%37.9%23.3%36.1%21.1%

Price Volatility Vs. Market

How volatile is Serco Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Serco Group undervalued compared to its fair value and its price relative to the market?

18.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SECC.F ($1.54) is trading below our estimate of fair value ($1.88)

Significantly Below Fair Value: SECC.F is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SECC.F is poor value based on its PE Ratio (29.8x) compared to the Commercial Services industry average (20.6x).

PE vs Market: SECC.F is poor value based on its PE Ratio (29.8x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: SECC.F is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: SECC.F is overvalued based on its PB Ratio (2.9x) compared to the US Commercial Services industry average (1.2x).


Next Steps

Future Growth

How is Serco Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

23.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SECC.F's forecast earnings growth (23% per year) is above the savings rate (1.7%).

Earnings vs Market: SECC.F's earnings (23% per year) are forecast to grow faster than the US market (13.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SECC.F's revenue (4.7% per year) is forecast to grow slower than the US market (7% per year).

High Growth Revenue: SECC.F's revenue (4.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SECC.F's Return on Equity is forecast to be high in 3 years time (20.6%)


Next Steps

Past Performance

How has Serco Group performed over the past 5 years?

95.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SECC.F has a large one-off loss of £49.5M impacting its December 31 2019 financial results.

Growing Profit Margin: SECC.F's current net profit margins (1.6%) are lower than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: SECC.F has become profitable over the past 5 years, growing earnings by 95.7% per year.

Accelerating Growth: SECC.F's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SECC.F had negative earnings growth (-25.2%) over the past year, making it difficult to compare to the Commercial Services industry average (2.5%).


Return on Equity

High ROE: SECC.F's Return on Equity (9.3%) is considered low.


Next Steps

Financial Health

How is Serco Group's financial position?


Financial Position Analysis

Short Term Liabilities: SECC.F's short term assets (£726.8M) do not cover its short term liabilities (£775.5M).

Long Term Liabilities: SECC.F's short term assets (£726.8M) do not cover its long term liabilities (£761.0M).


Debt to Equity History and Analysis

Debt Level: SECC.F's debt to equity ratio (56.2%) is considered high.

Reducing Debt: SECC.F had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: SECC.F's debt is well covered by operating cash flow (33.7%).

Interest Coverage: SECC.F's interest payments on its debt are well covered by EBIT (6.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Serco Group's current dividend yield, its reliability and sustainability?

1.77%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SECC.F's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SECC.F's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SECC.F's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SECC.F's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: SECC.F is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SECC.F's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

Rupert Soames (60yo)

5.92s

Tenure

UK£5,700,977

Compensation

Mr. Rupert C. Soames, OBE, has been the Group Chief Executive of Serco Group Plc since June 01, 2014. Mr. Soames served as the Group Chief Executive at Aggreko plc from July 1, 2003 to April 24, 2014. He h ...


CEO Compensation Analysis

Compensation vs Market: Rupert's total compensation ($USD7.04M) is above average for companies of similar size in the US market ($USD4.67M).

Compensation vs Earnings: Rupert's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Rupert Soames
Group CEO & Executive Director5.92yrsUK£5.70m0.36% £7.0m
Angus Cockburn
Group CFO & Executive Director5.5yrsUK£3.06m0.15% £2.9m
Stuart Ford
Head of Investor Relationsno datano datano data
David Eveleigh
Group General Counsel & Company Secretary4.42yrsno datano data
Marcus De Ville
Head of Media Relationsno datano datano data
Anthony Kirby
Group Human Resources Director2.5yrsno datano data
Ian Crichton
Managing Director of Health Business4.08yrsno datano data
Paul McCarter
Managing Director - UK Defense Business3.83yrsno datano data
Phil Malem
Chief Executive Officer of Serco Middle East1yrno datano data
Lianne Dance
Group Head of Reward1.33yrsno datano data

4.0yrs

Average Tenure

Experienced Management: SECC.F's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Rupert Soames
Group CEO & Executive Director5.92yrsUK£5.70m0.36% £7.0m
Angus Cockburn
Group CFO & Executive Director5.5yrsUK£3.06m0.15% £2.9m
David Dacquino
Chairman & CEO of Serco Americas2.83yrsno datano data
John Rishton
Senior Independent Non-Executive Director1.25yrsUK£92.28k0.0035% £68.4k
Roy Gardner
Independent Chairman of the Board4.75yrsUK£264.22k0.016% £317.0k
Ian El-Mokadem
Independent Non-Executive Director2.75yrsUK£63.00k0.0041% £79.2k
Lynne Peacock
Independent Non-Executive Director2.75yrsUK£70.50k0.0012% £23.8k
Eric Born
Independent Non-Executive Director1.25yrsUK£65.87k0.0025% £47.5k
Janis Lomax
Independent Non-Executive Director6.08yrsUK£70.50k0.0033% £63.4k
A. Bashforth
Independent Non-Executive Director2.58yrsUK£77.26k0.00082% £15.8k

2.8yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SECC.F's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7%.


Top Shareholders

Company Information

Serco Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Serco Group plc
  • Ticker: SECC.F
  • Exchange: OTCPK
  • Founded: 1929
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: UK£1.565b
  • Listing Market Cap: UK£1.932b
  • Shares outstanding: 1.22b
  • Website: https://www.serco.com

Number of Employees


Location

  • Serco Group plc
  • Serco House
  • 16 Bartley Wood Business Park
  • Hook
  • Hampshire
  • RG27 9UY
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SECC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
SRPLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
SEODB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
SRPLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
SRPSWX (SIX Swiss Exchange)YesOrdinary SharesCHCHFJan 1992
SCGP.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJan 2009

Biography

Serco Group plc provides public services in the United Kingdom, Europe, North America, the Asia Pacific, and the Middle East. The company offers base and operational support engineering, and management and information, as well as nuclear, space, and maritime services for the defense sector; and custodial, immigration detention, and detainee transport and monitoring services for the justice and immigration sectors. It also provides rail, ferry, and cycle operations; road traffic management; and air traffic control services to the transportation sector, as well as integrated facilities management, pathology and non-clinical support, and patient administration and contact services for the health sector. In addition, the company offers citizen services, including contact centers and case management; middle, back office, and IT; and employment and skills services. The company serves the United Kingdom and Canadian governments, devolved authorities, and other public sector customers; and federal and civilian agencies, and various state and municipal governments. Serco Group plc was founded in 1929 and is based in Hook, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 04:50
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.