Serco Group

Website: Serco Group
Index: FTSE 250
EPIC: SRP
Supersector: Industrial Goods and Services
Sector: Support Services
Subsector: Business Support Services
Market Cap: £3.18B
Payout Frequency: Semi-Annual

Next Serco Group Dividend

Serco Group next goes ex-dividend on 09/04/2026. This will be the Final dividend for 2026.

The dividend per share amount is 3.0500p (GBP) and the payment date is 08/05/2026.

Key dividend details

Final dividend (FY25): 3.05p per share
Total FY25 dividend: 4.50p per share (up 8% YoY; FY24: 4.16p)
Ex-dividend date: 09/04/2026
Record date: 10/04/2026
Payment date: 08/05/2026
Dividend policy/context: Board reiterates commitment to a growing and sustainable ordinary dividend within a disciplined capital allocation framework.

Dividend coverage and affordability

EPS cover (FY25): Underlying diluted EPS 16.93p vs DPS 4.50p ? c.3.8x cover (payout c.27%). On reported diluted EPS 14.07p, cover c.3.1x.
Cash flow cover (FY25): Free cash flow £219m vs dividends paid £43.3m ? c.5x cover.
Balance sheet: Adjusted net debt £206m; leverage 0.7x (below 1–2x target), providing headroom.
Forward look (FY26 guidance): Underlying operating profit c.£300m; FCF c.£160m (still >3x cover on an annual DPS cost of ~£45m). Trading cash conversion expected at least 80%.

Analysis: sustainability and growth trajectory

Quality of cover: Strong earnings and cash cover, a multi-year record of robust cash conversion (FY25: 112%), and low leverage support dividend sustainability.
Growth prospects: FY25 DPS up 8%; management targets ongoing growth. FY26 guidance implies higher profit and continued cash generation; a substantial order book (£14.5bn, +9%) and record pipeline (£12.1bn) underpin medium-term earnings visibility.
Capital allocation: Explicit commitment to grow ordinary dividends while returning surplus capital via buybacks. With leverage below target, DPS growth remains well-supported alongside buybacks.
Coverage resilience: Even with FY26 FCF guide lower at £160m (mobilisation effects), dividend remains comfortably covered; buybacks will also modestly reduce the cash cost of future dividends.

Structural and capital allocation developments impacting dividends

New £75m share buyback announced, to complete by HY26; follows £50m buyback in 2025. Cumulative buybacks since 2021 now substantial—supportive to per-share metrics and future DPS affordability.
MT&S acquisition (£242m EV) completed May 2025, broadening defence/space capabilities; expected to contribute to FY26 profit growth (supports dividend capacity).
Portfolio focus: Disposal of Hong Kong operations; strategic partnership with Mubadala (certain ME contracts novated—reduces reported revenue but no impact to underlying profit), both consistent with disciplined capital deployment.
Board to review capital position at HY26, keeping optionality for further buybacks or bolt-ons alongside dividend growth.

Risks and flags to dividend stability

Revenue mix shifts: Lower immigration activities in UK & Europe and Asia Pacific weigh on divisional growth; FY26 assumes c.3% organic growth driven by Defence and Citizen Services to offset.
Cash flow guidance: FY26 FCF guided to £160m (down from £219m) due to working capital/mobilisation; still ample cover but a watch-point.
Financing costs rising: Higher USPP debt costs (blended c.5.64%) lift net finance costs to c.£52m in FY26; currently manageable given profit growth and low leverage.
Government exposure: Timing risks from procurement cycles (e.g., US shutdown delays), rebid calendar (~£0.5bn ACV in 2026), and policy changes remain inherent sector risks.
Asia Pacific: Turnaround ongoing; partial derecognition of Australian deferred tax asset signals cautious outlook—even if non-cash, it highlights execution risk in that region.
FX sensitivity and geopolitical developments (especially Middle East) may affect timing and margins, though diversified footprint and strong order book mitigate.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
10/04/2025	09/05/2025	Final	2.82p	GBX
28/08/2025	03/10/2025	Interim	1.45p	GBX

Total (Annual Dividends Per Share): 4.27p

Dividend Yield = Annual Dividends Per Share (4.27p) ÷ Share Price (313.4p) = 1.36%

Ex Dividend Date	Payment Date	Type	Amount	Currency
09/04/2026	08/05/2026	Final	3.0500p	GBX
28/08/2025	03/10/2025	Interim	1.45p	GBX
10/04/2025	09/05/2025	Final	2.82p	GBX
29/08/2024	04/10/2024	Interim	1.34p	GBX
18/04/2024	10/05/2024	Final	2.27p	GBX
07/09/2023	06/10/2023	Interim	1.14p	GBX
11/05/2023	09/06/2023	Final	1.92p	GBX
08/09/2022	06/10/2022	Interim	0.94p	GBX
12/05/2022	07/06/2022	Final	1.61p	GBX
16/09/2021	12/10/2021	1st Interim	0.80p	GBX
13/05/2021	04/06/2021	Final	1.40p	GBX
14/05/2020	05/06/2020	Final	1.00p	GBX
03/09/2014	17/10/2014	Interim	3.10p	GBX
12/03/2014	14/05/2014	Final	7.45p	GBX
04/09/2013	18/10/2013	Interim	3.10p	GBX

Year	Interim	Final	Currency	Total	Change
2024	1.340	2.270	GBX	3.610	17.970
2023	1.140	1.920	GBX	3.060	20.000
2022	0.940	1.610	GBX	2.550	15.900
2021		1.400	GBX	2.200	120.000
2020		1.000	GBX	1.000	-67.740
2014	3.100		GBX	3.100	-70.610
2013	3.100	7.450	GBX	10.550

Number of Shares:

Payment	Paid	Amount
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