December 20, 2013, City AM
CAROLINE DE LA SOUJEOLE | CANTOR FITZGERALD
“We do not subscribe to the view that the worst is over. Last week, Serco announced it was taking a £17m onerous contract provision against three underperforming healthcare contracts. We believe the pace of contract awards could remain sluggish in the short term.
MIKE ALLEN PANMURE | GORDON
“It contains few surprises from the profit warning seen in November. Exceptional items are likely to be higher, which will impact cash flow, but consensus estimates for 2013 earnings are unlikely to change. We think the current valuation may have captured most of the downside potential.
CLIVE ROBERTS | STANDARD & POOR’S
“We maintain our ‘buy’ rating on Serco. The Cabinet Office’s assessment of Serco’s corporate renewal programme will be concluded in January 2014, having described progress to date as ‘well advanced’. We have reduced our 2014 and 2015 earnings per share by one per cent.