MARKET REPORT: Outsourcer Serco gives reason to cheer

In a depressed market focused on interest rate factors, outsourcer Serco managed to break through the gloomy times and satisfy investors with a reassuring trading update.

The FTSE 250-listed company expects sales of around £4.8 billion by 2024, down 3 percent year-on-year but in line with expectations.

Serco expects underlying operating profit to be around £260 million in 2025 and sales to be in line with 2024 levels, despite a cut of around 7 percent due to the loss of immigration contracts in Britain and Australia.

Growth was expected to be driven by US defense operations.

CEO Mark Irwin said the financial position is strong. In response, shares rose 8.4 per cent, or 11.7p, to 150.4p, by far the biggest gainer on the FTSE 350.

Overall, London benchmarks fell sharply in response to interest rate statements from the Bank of England and the US Federal Reserve.

The FTSE 100 fell 1.1 percent, or 93.79 points, to 8,105.32, while the FTSE 250 fell 1 percent, or 202.61 points, to 20,399.38.

After a sharp sell-off on Wall Street following Wednesday’s Fed rate news, investment groups with exposure to US markets tumbled.

On the FTSE 100, Pershing Square fell 3.8 per cent, or 146p, to 3732p, while Scottish Mortgage Investment Trust fell 1.8 per cent, or 27.2p, to 939.8p, and lender Barclays fell 2.6 per cent , or 6.8p, to 260.25. P

Intermediate Capital was the biggest faller in the blue chip, down 2.7 per cent, or 58p, to 2076p, brushing aside a price target increase and repeated ‘buy’ ratings from analysts at Jefferies.

After recent good gains, British Airways owner IAG lost 0.3 percent, or 0.8 cents, to 302 cents as the airline said it had to make additional long-haul schedule changes due to delays at Rolls-Royce due to a problem with 1,000 engines for BA Boeing 787 Dreamliner.

There were only a handful of FTSE 100 winners, led by water companies buoyed by Ofwat’s pricing ruling.

Severn Trent gained 0.9 percent, or 24p, at 2574p, while United Utilities added 0.1 percent, or 9.5p, at 1064p.

On the second line, Wood Group rose 0.2 percent, or 0.1 cent, to 65.3 cents as the oil services company said it has been awarded a significant follow-on contract from OMV Petrom to modernize a refinery in Romania, its largest . first major production facility for sustainable aviation fuel in the region.

In other contract news, Costain lifted 0.5 percent, or 0.5 cents, to 109.5 cents after the construction group secured another substantial deal as part of the HS2 rail project through its joint venture with Siemens Mobility.

The contract is worth approximately £300 million.

Jaywing climbed 18.25 percent, or 0.25 cents, to 1.6 cents after the marketing and data company issued a positive outlook statement despite a wider first-half loss.

But Falkland Islands specialist services provider FIH Group fell 8.3 per cent, or 20 cents, to 220 cents, after swinging to an interim pre-tax loss, as sales fell 32 per cent.