Serco Group plc
Serco Group plc provides public services in the United Kingdom, Europe, North America, the Asia Pacific, and the Middle East. It offers service design and advisory, resourcing, programme management, systems integration, case management, engineering, and assets and facilities management services. Th…
Serco Group plc provides public services in the United Kingdom, Europe, North America, the Asia Pacific, and the Middle East. It offers service design and advisory, resourcing, programme management, systems integration, case management, engineering, and assets and facilities management services. The company also provides administrative and back office, asylum seeker accommodation or passenger transport services; and supports in the decarbonization journeys of customers. It 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 in citizen services, defense, health and other facilities management, justice and immigration, and transport sectors. Serco Group plc was founded in 1929 and is based in Hook, the United Kingdom.After signing in, return here and select “Add to watchlist”. Saving companies requires a verified email address.
Looks undervalued
5-year outlook: Not shown because confidence is low: Earnings-based DCF disagrees strongly.
Other models: GBP 1.98–5.29 (median 4.83). The recommended value is in line with them.
Why: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Start with the price and fair value range, then review the data dates and assumptions below. Estimates are not predictions or investment advice.
Market price below modeled range
Free-cash-flow DCF using Fiscal year 2025 reported free cash flow, with cash, debt, and shares from the latest report. Base assumptions are 4.02% growth, 2.7% terminal growth, and 10% discount. Low/high cases vary growth by 2 and terminal growth/discount by 1 percentage point; this illustrative range is not a statistical confidence interval or investment advice.
Assumptions: growth 4.02%, discount rate 10%, terminal growth 2.70% (sector defaults). See a worked example.
Blended growth assumption: 4.0% (sector default 6.2%, own revenue history 2.5%, analyst revenue consensus 3.7%).
Analyst consensus expects revenue growth of 3.7% a year; the growth assumption used is 4.0%.
Adjust assumptions
Why this model: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Compare models- Recommended: Free-cash-flow DCF — GBP 5.15 (+83.2%)
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EPS-based Gordon proxy
— GBP 1.98 (-29.5%)
Not used: Treats all earnings as if paid out and ignores the cash kept for reinvestment, so it overstates value for companies that retain most profit.
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DCF (trailing free cash flow)
— GBP 5.15 (+83.2%)
Not used: Free cash flow is 2.8x net income, which usually means costs such as lease payments sit outside operating cash flow, so it may be overstated.
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FCFF (steady state)
— GBP 4.83 (+71.8%)
Not used: Free cash flow is 2.8x net income, which usually means costs such as lease payments sit outside operating cash flow, so it may be overstated.
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EV/EBITDA (12x)
— GBP 5.29 (+88.4%)
Not used: Used only when free cash flow is far below earnings even after averaging three years; a fixed 12x multiple also ignores sector differences.
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Fade DCF (10-year growth fade)
— GBP 5.13 (+82.7%)
Not used: Free cash flow is 2.8x net income, which usually means costs such as lease payments sit outside operating cash flow, so it may be overstated.
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EV/Sales (Rule of 40)
— GBP 13.07 (+365.1%)
Not used: Used only for technology and communication companies whose cash-flow value is far below the price.
| Bear GBP 3.66 | 23.2% |
| Base GBP 5.15 | 45.4% |
| Bull GBP 7.80 | 64.0% |
Margin = (value − price) / value, so it is measured against the value and reads lower than the upside to value, which is measured against the price. Positive means the price is below that case.
At GBP 2.81 the market implies about this annual free-cash-flow growth for 5 years (terminal 2.7%, discount 10.0%).
Compare: the market implies -7.6% a year, this model assumes 4.0%. The model is more optimistic than the price, which is why it reads as undervalued.
Sensitivity: base value per share
How the Free-cash-flow DCF value changes with growth (rows) and discount rate (columns). Green cells are above the current price.
These are assumption-based scenarios, not a confidence interval. Scroll horizontally to see all discount rates.
| Growth \ Discount | 8.0% | 9.0% | 10.0% | 11.0% | 12.0% |
|---|---|---|---|---|---|
| 0.0% | 6.05 | 5.00 | 4.23 | 3.64 | 3.19 |
| 2.0% | 6.68 | 5.52 | 4.67 | 4.03 | 3.52 |
| 4.0% | 7.36 | 6.08 | 5.15 | 4.44 | 3.88 |
| 6.0% | 8.09 | 6.68 | 5.66 | 4.88 | 4.27 |
| 8.0% | 8.88 | 7.33 | 6.21 | 5.35 | 4.69 |
Track record: see the methodology page for how this model has performed historically, including its limits. Treat it as a screen, not a forecast.
Price history and fair value
6 months price change: +2.81% · GBP 2.81 · Market data through 06 Nov 2026 ; dashed line is today’s model base value (GBP 5.15). The fair value is today’s estimate, not what the model said in the past.
Saved price history is current through 06 Nov 2026; last refreshed 06 Nov 2026 18:14 (7 minutes ago).
07 May 2026Range GBP 2.18 – 2.9406 Nov 2026
Latest news
Headlines provided by EODHD. Articles may mention multiple companies and are not investment recommendations.
More detail: quality, peers, price history, dividends and financials
Quality score: 82 / 100
Five equal checks on reported history: profitability, cash generation, revenue growth, balance sheet and margins. It describes business quality, not whether the price is attractive.
| Profitability | 5 of 5 years profitable | 20 / 20 |
| Cash generation | free cash flow positive in 5 of 5 years | 20 / 20 |
| Growth | revenue +2.5% a year | 12 / 20 |
| Balance sheet | net debt 1.4x EBITDA | 20 / 20 |
| Margins | EBITDA margin 11% | 10 / 20 |
Peers in Industrials
Same-sector companies with a valuation, most undervalued first. Compare the margin of safety, yield and quality score side by side.
| Company | Price | Margin of safety | P/E | P/B | Yield | Quality |
|---|---|---|---|---|---|---|
| SRP.L (this company) | GBP 2.81 | 45.4% | 20.0 | 3.3 | 1.5% | 82 |
| EZJ.L easyJet plc | GBP 6.84 | 74.5% | 10.6 | 1.5 | 1.7% | 78 |
| WAWI.OL Wallenius Wilhelmsen ASA | NOK 160.10 | 64.9% | 7.0 | 2.2 | 0.3% | 100 |
| IAG.L International Consolidated Airlines Group S.A. | GBP 4.34 | 59.3% | 8.0 | 3.4 | 1.8% | 92 |
| TPK.L Travis Perkins plc | GBP 6.56 | 54.6% | – | 0.8 | 2.1% | 46 |
| DFDS.CO DFDS A/S | DKK 152.90 | 47.4% | – | 0.6 | – | 64 |
| DG.PA VINCI SA | EUR 111.60 | 42.2% | 12.9 | 2.1 | 4.2% | 90 |
| HAFNI.OL Hafnia Limited | NOK 87.45 | 41.9% | 7.1 | 1.8 | 1.3% | 100 |
| MPCC.OL MPC Container Ships ASA | NOK 23.90 | 34.4% | 5.4 | 1.1 | 0.8% | 80 |
| Peer median | 7.5 | 1.6 | ||||
Dividends
Paid in the last 12 months: GBP 0.00 per share · yield 0.02% at the current price.
| Year | Dividends per share |
|---|---|
| 2026 (so far) | 0.000 |
| 2025 | 0.000 |
| 2024 | 0.000 |
| 2023 | 0.000 |
| 2022 | 0.000 |
| 2021 | 0.000 |
Annual financial statement
Saved annual report · Fiscal year 2025 · EODHD annual statements · period ended 31 Dec 2025
| Revenue | GBP 4,876,800,000 |
|---|---|
| EBITDA | GBP 515,600,000 |
| EBIT | GBP 294,100,000 |
| Net income | GBP 145,600,000 |
| Free cash flow | GBP 405,600,000 |
| Capital expenditures | GBP 21,500,000 |
| Debt | GBP 909,300,000 |
| Cash | GBP 199,300,000 |
| Working capital | GBP -65,400,000 |
| Shares outstanding | 1,034,700,000 |
| Reported dividends per share | GBP 0.0418 |