EDINBURGH (Reuters) - British outsourcer Serco (L:SRP) said on Thursday it expects revenue to grow again in 2019 as it starts to see the results of an overhaul that began in 2015.
While UK outsourcing remains difficult after the collapse of Carillion and with Interserve (L:IRV) struggling to survive, some analysts now see Serco as a bright spot, which will next year be able to reinstate a dividend suspended in 2014.
"We expect to achieve positive free cash flow in 2018 after three years of outflows," Serco said in a statement.
The company provides services for public sector departments in Britain and abroad, operating prisons and asylum seeker accommodation, organising health sector administration, running trains and ferries and providing IT support to the US Navy.
It said it expects underlying trading profit to grow 30 to 40 percent to 90 million to 95 million pounds in 2018, in line with analysts' forecasts, and to 95 million to 100 million pounds in 2019, with revenues seen rising to between 2.8 billion and 2.9 billion pounds, from 2.8 billion pounds in 2018.
"With revenues no longer reducing, cash generation turning positive and the benefit of a strong balance sheet, we are pleased with progress, and we expect further improvement in 2019," Chief Executive Rupert Soames said.