Annual Report
and Accounts
2025
With a primary focus on serving governments globally,
our services are powered by more than 54,000
colleagues working across multiple sectors including
Defence, Justice & Immigration, Citizen Services,
Health& Other Facilities Management and Transport.
We operate across four regions: North America;
UK&Europe; Asia Pacific; and the Middle East.
Contents
Strategic Report
01 Highlights
02 At a Glance
04 Chair’s Statement
06 Group Chief Executive’s Review
10 Our Market
12 Our Strategy
14 Our Strategy in action
18 Key Performance Indicators
20 Group Review
25 Divisional Review
34 Impact report
60 Task Force on Climate-related
Financial Disclosures
66 Risk Management
69 Principal Risks and Uncertainties
76 Viability Statement
78 Non-Financial and Sustainability
Information Statement
Corporate Governance
80 Chair’s Corporate
Governance Overview
82 Our Governance Framework
83 Board of Directors
86 Group Executive Committee
87 Board leadership and
Company Purpose
89 Stakeholder engagement
90 Section 172 (1) Statement
93 Composition, succession
and evaluation
94 Nomination Committee Report
97 Audit Committee Report
103 Risk Committee Report
104 Corporate Responsibility
Committee Report
105 Directors’ Remuneration Report
127 Directors’ Report:
Other Information
134 Directors’ Responsibility
Statement
Financial Statements
136 Independent Auditor’s Report
150 Consolidated Income Statement
151 Consolidated Statement of
Comprehensive Income
152 Consolidated Statement
ofChanges in Equity
153 Consolidated Balance Sheet
155 Consolidated Cash Flow Statement
156 Notes to the Consolidated
Financial Statements
222 Company Balance Sheet
223 Company Statement of
Changes in Equity
224 Notes to the Company
Financial Statements
Other Information
232 Alternative Performance
Measures
235 Debt covenants
236 Glossary
238 Our Impact – Data Tables
244 Shareholder information
Serco Group plc Annual Report and Accounts 2025
For a digital copy of this report
andthe latest investor information,
please visit our corporate website
at serco.com.
Front cover image and left-hand image on page 3: LCpl Isaac Reeson | UK MOD © Crown copyright
2024, is licensed under the Open Government Licence (OGL) v3.0, nationalarchives.gov.uk/doc/open-
government-licence/version/3/
Our Purpose is
toimpacta
betterfuture.
Financial highlights
Revenue Underlying operating
profit (UOP)
Reported operating
profit
£4.9bn
£272m
£246m
2024: £4.8bn
2024: £274m
2024: £130m
Order book
Underlying EPS,
diluted
Reported EPS,
diluted
£14.5bn
16.93p
14.07p
2024: £13.3bn
2024: 16.67p
2024: 4.10p
Full-year dividend
pershare
Underlying return on
invested capital (ROIC)
Free cash flow (FCF)
4.50p
25.9%
£219m
2024: 4.16p
2024: 26.2%
2024: £228m
Non-financial highlights
Employee
engagement
71 points
2024: 72 points
Lost time incident
frequency rate (LTIFR)
3.6 per
1m hours
2024: 4.9 per 1m hours
Highlights
Serco Group plc | Annual Report and Accounts 2025 | 1
Read our KPIs on pages 18 and
19. Definitions for KPIs can be
found in the Glossary on pages
236 and 237.
Read our Group Chief Executive’s
Review on pages 6 to 9.
Read our Impact report
onpages34 to 65.
25+
countries
650+
contracts
54k+
colleagues
Our sectors
Protecting national
and international
security interests.
£2,097m
Adjusted revenue
39%
Safeguarding the
communities in
whichwe operate.
£1,589m
Adjusted revenue
29%
Impacting the lives
ofcitizens and
communities.
£849m
Adjusted revenue
16%
Enhancing public
sector infrastructure,
patient experience
and care quality.
£462m
Adjusted revenue
9%
Facilitating safe and
efficient movement of
people and goods.
£395m
Adjusted revenue
7%
All revenue numbers above include our reported revenue plus our share of revenue from joint ventures.
Where we operate
Serco’s operations are across four geographical
Divisions: North America; UK & Europe; Asia
Pacific; and Middle East.
Adjusted revenue including our share of joint ventures by Division
North America £1,463m 27%
UK & Europe £3,069m 57%
Asia Pacific £655m 12%
Middle East £205m 4%
At a Glance continued
Serco Group plc | Annual Report and Accounts 2025 | 3
Read our Divisional Reviews on pages 25 to 29.
Adjusted revenue
2025
£5,392m
2024
£5,292m
The Board’s role is to ensure that
our strategy remains focused on
the areas where Serco can deliver
the greatest impact and
sustainable growth.
Keith Williams
Chair
As I write my first statement as
Chair of Serco, I am delighted
tohave joined a company that
plays a vital role in supporting
governments and citizens across
the world.
Having worked with businesses serving both consumers
and the Government for many years, I see Serco as well
placed to deliver expertise where it is most needed,
particularly in our Defence, Justice & Immigration, and
Citizen Services sectors. The combination of expanding
markets and the deep skills of our colleagues, positions
Serco well to help governments provide crucial services
while driving greater productivity and innovation. These
strengths are a major reason why I am excited to be
leading the Board at this stage in the Company’s
development and at a time when our role in supporting
governments as they respond to changing demands
remains critically important.
I joined the Board in August 2025 and became Chair
on1 January this year. On behalf of the Board, I would
like to express our sincere thanks to John Rishton for
hisoutstanding contribution over the past nine years.
During his tenure, Serco made enormous progress
andis well set for the future.
Since joining, I have spent time visiting our operations
across the UK and meeting many frontline colleagues.
Their dedication, professionalism, and ability to deliver
in challenging environments have been hugely
impressive. I have also taken part in a colleague forum
tohear views from across the business, held discussions
with major shareholders, and participated in Board
andCommittee meetings focused on strategy and
performance. While my initial months have been UK-
based, I look forward to meeting international
colleagues in the year ahead.
Chair’s Statement
Serco Group plc | Annual Report and Accounts 2025 | 4
Well positioned with
significant long-term
opportunities
Read our Corporate Governance Report
on pages79 to 134.
The environment for governments is changing
significantly and at pace. We are entering a period in
which governments around the world must navigate
budget pressures, growing global instability and a shift
toward digitally delivered services. These forces are
reshaping how governments operate and the outcomes
they seek from partners like Serco. Our ability to design,
deliver, and continuously improve critical services
through integrated operational and digital expertise
closely aligns with these emerging needs. As these
pressures grow, the markets in which we operate are
expanding. This creates significant long-term
opportunities for Serco to grow our role in delivering
mission-critical public services.
With this context in mind, and looking ahead to 2026,
three priorities stand out: pursuing future growth
opportunities, refreshing the Board to support that growth
and helping our management team come together to best
serve colleagues, customers and partners, communities
and shareholders. With new leadership in place, the
Board’s role is to ensure their successful integration and
that our strategy remains focused on the areas where
Serco can deliver the greatest impact and sustainable
growth, while continuing to act with integrity and in line
with ourvalues.
It is clear there is a significant opportunity to grow the
business. We are well-positioned in large, growing
markets, and by focusing our efforts and further
developing our capabilities, we can take advantage of
our strengths to grow safely, sustainably and profitably.
The current Board has done a terrific job preparing
Serco for its next phase, and given the longer tenures of
some of our Non-Executive Directors (NEDs), now is the
right moment to refresh and support the business while
maintaining the discipline that has strengthened our
foundations. Success will require us not only to deliver
great service today, but also to innovate and develop
new capabilities for the future. The world is more
uncertain than it has been for many years, and we must
remain sensitive to the challenges this creates, acting
with integrity and purpose in all that we do.
I look forward to sharing our progress in the year ahead,
and to supporting the Company as we continue to
deliver for our customers, colleagues, and shareholders.
Keith Williams
Chair
4 March 2026
Chair’s Statement continued
Serco Group plc | Annual Report and Accounts 2025 | 5
With a focus on sustainable growth,
operational excellence and competitiveness,
we have delivered another year of good
outcomes. Acrossour growth markets,
wehave reinforced our position
withexpanded capabilities that are
well-aligned to customer priorities
inDefence, Justice &Immigration
andCitizen Services.
Anthony Kirby
Group Chief Executive
In 2025, the Group demonstrated
significant strategic and operational
progress. Our strong performance, as
a trusted and mission-critical partner
to governments globally, reflects the
hard work and dedication of my global
team of over 50,000 colleagues, for
which I am grateful.
Strong performance in 2025
• Revenue: £4.9bn, up 3% at constant currency
including 1% organic growth; good progress with
contract wins and growth more than offsetting
immigration reductions in UK and Australia.
• Underlying operating profit: £272m, up 1% at constant
currency; reported operating profit of £246m, up 89%.
• Underlying earnings per share: increased 2% to 16.93p.
• Underlying operating margin: 5.6%, in line with
medium-term target of 5-6%.
• Cash flow: strong free cash flow of £219m, ahead of
guidance of ~£170m following strong collections,
112% trading cash conversion. Average cash
conversion over 100% for last seven years.
• Order intake: £5.5bn, increased 13%; book-to-bill of
114%. Around two thirds of awards in defence. Increased
order book of £14.5bn, 9% higher than end of 2024.
• Strong financial position: adjusted net debt £206m,
leverage of 0.7x net debt to EBITDA including funding
£245m acquisition of MT&S and £50m share buyback.
Significantly below target range of 1-2x.
• Shareholder returns: £50m share buyback completed
in 2025, new £75m buyback announced, to be
completed by half year results bringing total buybacks
since 2021 to £465m. The Board will further review
capital position at half year. Recommended final
dividend of 3.05 pence per share, +8% year-on-year.
Group Chief Executive’s Review
Serco Group plc | Annual Report and Accounts 2025 | 6
To watch Anthony Kirby present our full-year
2025 results, visit serco.com/investors.
Enabling critical
government missions
globally
In 2025, the Group made significant strategic progress
as we continue to be a mission-critical partner to
customers during a period of heightened geopolitical
tensions and increasing fiscal constraints for
governments around the world.
Against a backdrop of rising government expenditure and
elevated deficits, customers continue to prioritise the
delivery of critical and efficient services - where we have a
proven track record. This is seen across all our priority
markets; justice and immigration, citizen services and
particularly in defence. Governments around the world are
committing to increased spending in the face of global
security challenges; from the UK prioritising the
development of sovereign capabilities, to the US’ focus on
defending the homeland, defence investment is set to be a
priority for years to come. Our £5.5bn order intake, of which
around two-thirds was in defence, book-to-bill of 114%, and
the highest pipeline in over a decade, demonstrate the
strength of demand for Serco’s critical services.
Across our markets, the ongoing pressure on
governments to deliver more and better for less
continues to ground our strategy. We are a leader in
helping governments navigate these pressures by
bringing together the right people, right technology and
right partners to address some of their most complex
challenges. The continuing relevance of our expanding
capabilities, and our ability to deliver efficient services at
scale, underpins the confidence we have in our chosen
and diverse markets.
It is through our key strategic priority areas of Growth,
Competitiveness, and Operational Excellence that the
management team will continue to develop and lead our
business in the medium term.
Growth – robust awards & pipeline across our most
attractive markets
We have sharpened our focus on the sectors with the
greatest opportunity – Defence, Justice & Immigration
and Citizen Services.
The strategic strengthening of our Defence platform
over recent years through investment in talent, skills and
technology, alongside acquisitions, has allowed us to
deepen our role supporting governments with national
security and critical infrastructure. Our selection to
deliver the UK Armed Forces’ next-generation recruiting
solution is a product of our enhanced defence
capabilities. We have led the overall design and delivery
of this complex service, including the integration of
technology platforms and subject matter experts
through a strong team of international partners. The
mobilisation of this service, the first-of-its kind to cover all
three forces is well underway. We were also proud to
commence the next generation contract to provide
defence maritime services for the Royal Navy and extend
our relationship with the Royal Canadian Air Force at
several of their training facilities.
Our ability to leverage global best practice was evident
in Justice & Immigration, having utilised our experience
and capabilities from the UK to secure the Victoria
Prisoner Transport contract in Australia in the year. We
also retained our contract to manage HMP Dovegate, a
Category B adult male prison, which includes one of the
few Therapeutic Community provisions in the UK. In
immigration, we continue to see demand for our broad
range of services and expertise into the medium term as
policy, conflict and climate change influences cross-
border movements. Having integrated our two EU-based
acquisitions, our ability to manage fluctuating migration
demand through safe, secure and humane operations
was again relied upon by governments across Europe.
In Citizen Services, reform of public services continued to
be in focus as governments looked to integrate new
technology, innovation and efficiency. Our track record
of strong execution helped us extend some long-
standing partnerships, including an initial £110m five-
year contract with Transport for London to continue to
deliver the London Cycle Hire scheme, and in the Middle
East we won a £100m extension with Dubai Airports to
deliver customer services. We also added new customers
to our Citizen Services sector including the BBC.
Competitiveness – focusing our portfolio, investing to
deliver organic growth
During the year we concentrated on the competitiveness of
the entire portfolio. This included a focus on efficiency and
productivity through process improvements, better use of
resources and increased automation which all contribute
towards our increased 2026 margin guidance of c.6%.
In Asia Pacific, our dedicated programme to improve
productivity and right-size the platform has made good
progress throughout the year, following the ending of
the Australian Immigration contract. This has been
supported by the disposal of our small Hong Kong
business, which completed in September, allowing us to
focus our efforts on Australia and New Zealand, where
we have begun to see some new business wins.
In the Middle East, our new partnership with Mubadala,
one of Abu Dhabi’s sovereign wealth funds, has created
a leading infrastructure and asset management
operation. Through our operational expertise and
Mubadala’s extensive market presence we see increased
opportunity in this growing market.
Group Chief Executive’s Review continued
Serco Group plc | Annual Report and Accounts 2025 | 7
Operational Excellence – strong customer retention
rates a recognition of superb delivery
During 2025, we expanded our defence mission
readiness capability through the acquisition of MT&S,
which completed in May. Integration into our back-office
platforms was completed inside six months, with around
900 new colleagues joining the organisation. So far,
MT&S has delivered £180m of contract wins in addition
to the retention of the significant virtual training contract,
known as DMON, which was secured just prior to
completion. We have also exported MT&S capabilities
into existing Serco operations, including to support our
retention of the Australian Defence Force naval training
contract at HMAS Watsons Bay.
Central to delivering operational excellence is the way in
which we motivate, manage and retain our people.
During the year, we streamlined HR systems and
processes, introduced leading-edge technology and AI
to empower our people, and further embedded a
culture of operational excellence across the Group.
These actions resulted in the retention of approximately
3,400 additional colleagues on an annualised basis and
an eight-percentage-point reduction in attrition since
2023. Colleague engagement remains high at over 70
points and has been at or above 70 points in all of the
last five years.
In parallel, we deployed new technology-enabled risk
management systems and our programme of safety
initiatives contributed to a 22% reduction in safety
incidents and over 2,500 fewer lost working days. We
were also proud to retain our top tier position in the
CCLA corporate mental health benchmark and to have
acquired an ISO45003 for colleague psychological safety
within our UK immigration business.
Our relentless focus on operational execution is
reflected in how our customers measure our quality. Our
Contractor Performance Assessment Report (CPAR)
scores - the US Government’s mechanism for evaluating
suppliers - have consistently exceeded 95% at
satisfactory or better. This has supported a contract
retention rate of over 90% across the Group. Our strong
retention rate and average contract length of around
seven years contribute to our increased £14.5bn order
book at full year.
We also enter 2026 with a management team to drive
Serco ahead in the next phase of our journey. Mark Reid
will become Group CFO when Nigel Crossley retires in
March this year, as previously announced. I look forward
to working with Mark to build on our strong foundations
through the execution of our strategic priorities.
I’d like to reiterate my thanks to Nigel for his significant
contribution to the Group’s progress over the last 11
years and the support he has been to me. He leaves the
Group in an excellent financial position, having
contributed to strong cash generation, good capital
deployment and excellent profitable growth. On behalf
of everyone at Serco, I would like to wish him all the very
best for a safe and enjoyable retirement.
Outlook – strategic progress and strong order book
underpins 2026 guidance
Following a year of strong contract wins, we enter 2026
with an increased order book and pipeline, reflecting
our position as a trusted, mission-critical partner to
governments.
Events such as the US Government shutdown and the lag
between spending commitments being announced and
opportunities being realised are a feature of the market.
We expect this to continue in the near term and note the
emerging situation in the Middle East. Fundamentally,
the structural drivers of demand in all our chosen sectors
will continue as governments prioritise national and
international security, resilience and efficiency as
pressure increases on them to do more, and better, for
less. Increased defence spending, public service reform
and strain on justice and immigration systems will remain
features of our markets in the medium term. We are well
positioned to deliver strong operational outcomes,
increased organic revenue growth and underlying
operating profit, good cash generation and continued
strong returns on invested capital.
Looking forward, our strong financial performance
enables us to continue to deliver all aspects of our
capital allocation strategy: investing in the business to
drive growth and efficiency; increasing returns to
shareholders through dividends; maintaining adequate
headroom to fund strategic acquisitions; and returning
surplus capital to shareholders. In this context, we are
pleased to announce a new £75m share buyback to be
completed by the half year results and a dividend
increase of 8%. We will again review the capital position
at half year in line with our capital allocation priorities.
Anthony Kirby
Group Chief Executive
4March 2026
Read more in our Strategy in Action section
onpages 14 to 17.
Group Chief Executive’s Review continued
Serco Group plc | Annual Report and Accounts 2025 | 8
Acknowledgements
As we look back on a year of strong delivery and set our
direction for 2026 and beyond, I want to pause to recognise
the colleagues whose dedication has gone above and beyond.
Jessica Perez
Human Resources Business
Partner, People, Culture &
Communications
Jessica played a critical role
inintegrating around 900
colleagues following the MT&S
acquisition – a strategically
important step in strengthening
Serco’s defence capability. Through her
professionalism, empathy and clear communication,
she preserved trust, engagement and operational
continuity during a period of significant change.
Jakobus Fourie
Contract Manager,
Sharjah ANS
Jakobus and the
Sharjah Air
Navigation Services
(ANS) management team accelerated the
development of the UAE national workforce by
training the first female Emirati air traffic controllers
and increasing national representation across
operational staff to 50%, setting a powerful example
for capability building and inclusion.
NOMARS Defiant Team, US Maritime
Engineering,Technology & Sustainment
The NOMARS Defiant Team delivered USX-1 Defiant
– the first autonomous vessel designed to run
crewless for a year – resetting the bar for endurance,
innovation, and cost-effective naval power.
The Nuyina Crew
Australian Research/
Supply Vessel (ASRV)*
The Nuyina crew pulled
off two of the longest
and toughest Antarctic
voyages in Serco’s
history, resupplying every Antarctic station in one
deployment before pivoting straight into a glacier
science mission. Their precision, discipline and grit
delivered exceptional safety, service, and scientific
support inone of the harshest environments on Earth.
Gordon Smith
EUMETSAT Data Access
SystemOperations,
Engineering, Europe
When severe storms struck
India’s coast, Gordon stepped
in to coordinate the urgent
delivery of critical satellite data, ensuring authorities
could support evacuations and protect lives. His swift
action and clear communication exemplify Serco’s
value of Trust, showing how individual dedication
can make a real difference when it matters most.
John Hewitson
Contract Director,
HMP&YOIDoncaster
John’s leadership at His
Majesty’s Prison & Young
Offenders Institute (HMP & YOI)
Doncaster, UK, was recognised
by HM Inspectorate of Prisons,
which noted committed leadership, a well-ordered
establishment, and a positive overall direction. The
inspection also highlighted strong outcomes in
preparation for release, including outstanding
supportfor family ties.
Group Chief Executive’s Review continued
Serco Group plc | Annual Report and Accounts 2025 | 9
* Image top right: RSV Nuyina in Antarctica breaking ice supplied by AAD.
Photographer Pete Harmsen.
In 2025, governments faced new
geopolitical tensions, evolving
fiscal priorities, and continuing
conflicts, alongside dramatic
technological shifts. This has
created positive dynamics in
some of our key markets –
particularly defence.
The global government services market remains large,
resilient and growing. As such we remain well-positioned
to capture emerging opportunities through trusted
partnerships and technology-enabled solutions. The
sector, however, has not been entirely insulated from
some of the challenges created by these
macroeconomic developments – from changing
migration patterns to the US Government shutdown.
The Four Forces, which we have long identified as
drivers of demand (see following page), continue to be
present and, in some cases, intensifying. This underpins
our confidence in our market, both in the near and
longer term. Our diverse portfolio and technology
agnostic model will enable us to adapt and thrive as
themarket evolves as a result of these forces.
Growing government spending, with an acute
acceleration in defence investment
Estimates put our addressable market around £900bn
and growing at ~3% annually. That said, the precise
boundaries of our market are complex to define –
i.e.theinclusion or exclusion of non-departmental
bodies such as quangos. Nonetheless, the scale and
structural characteristics of our market are clear.
Proxy metrics for our market further evidence these
characteristics, including its size and growth. For
example, UK Government procurement spending
outside the public sector reached £434bn in 2024/25,
growing by 5%
1
; US Federal Government spending
reached $7trn, up 4% year-on-year
2
; and the European
Union delivered a 6% increase in its spending to
€200bn
3
. Regardless of the exact figure, the significant
scale, robust growth rate and high barriers to entry
thatare features of our market are evident.
In 2025, these qualities of our market were most stark
when it came to defence. NATO allies reaffirmed
commitments to significantly increase defence spending,
with targets reaching a minimum of 5% of GDP by 2035
4
.
In the near term, across our markets, we have seen
increases as well. The UK, for example, in 2024/25 spent
£60bn on defence, which will rise to £62bn in 2025/26,
increasing further to £74bn by 2028/29
5
. Thisequates to
a real-terms growth rate of around 4% over the five-year
period. The world’s biggest defence spender, the US,
saw its military expenditure hit USD$917bn (up around
5%), accounting for 13% of Federal spending in 2025
6,7
.
Significant further increases are being mooted, with the
President calling for defence budgets to rise to
USD$1.5trn in 2027
8
.
Although much of this investment is directed toward
equipment and manufacturing, significant allocations
remain in non-discretionary areas aligned with our
capabilities – such as recruitment, training and
operational support. Similarly, in civilian markets,
governments continue to prioritise essential services,
including justice and critical infrastructure. These
dynamics give us confidence in Serco’s position as a
trusted partner to governments, able to capture growth
opportunities in a market defined by reliability, scale,
and mission-critical delivery.
Policy changes delay customer decisions
While aggregate demand remains strong and growing,
policy changes and macroeconomic uncertainty have
created delays in decision-making regarding the award
of contracts in somemarkets.
At the start of the year, the potential impacts of the US
Department of Government Efficiency (DOGE) dominated
headlines in our sector. As we noted at our half-year
results, our pipeline of bids and portfolio of existing
contracts was largely resistant to the effects of DOGE.
Our Market
Serco Group plc | Annual Report and Accounts 2025 | 10
1. House of Commons Library – Procurement statistics: a short guide.
2. US Treasury – Fiscal Data: Spending.
3. EU Parliament – Budget 2025.
4. NATO – 5% Defence Expenditure Commitments.
Helping governments
navigate global change
5. UK defence spending – House of Commons Library.
6. US Treasury – Monthly Treasury Estimates: September 2025.
7. US Treasury – Monthly Treasury Estimates: September 2024.
8. Politico – Trump calls for record $1.5 trillion defense budget, a 50% jump.
Wehave seen reduced demand in only a small number
ofcontracts, alongside some delays to decisions around
awards. This is primarily a product of the essential nature
of the services that we deliver. Thedelays are, in part at
least, driven by uncertainty as government-side officials
and operators look to interpret the evolving intent of
policymakers, rather than a fundamental shift in the
structural drivers ofdemand.
Equally, despite our robust Order intake (£5.5bn),
aslow-down in awards has also been created by the
USGovernment shutdown in the latter part of 2025.
Ourpipeline has again remained largely insulated from
any cancellations resulting from the Federal budget
negotiations. Delays have nonetheless materialised, as
evidenced by the £5.0bn (up 138% on 2024) of the
North American pipeline recorded at the end of 2025 –
an increase partially driven by adjudications slipping.
Similarly, in the UK & Europe, shifting migration policy
has created new dynamics, but the underlying need for
our essential services persists. Increased border security
on the periphery of Europe and changing domestic
policies around asylum have seen volumes of people
movements reduce slightly from record highs on the
continent. Equally, in the UK, the Government remains
focused on reforming asylum accommodation,
particularly regarding the use of hotels – an aim we
arecommitted to supporting. Across all geographies
inwhich we operate, however, there has been a
sustained need to house and support people as they
move between countries.
More broadly in the UK, increased people costs as a
result of new legislation – such as the National Insurance
contributions increase – has further reduced the
attractiveness of lower-margin, commoditised services.
This reaffirms our focus on higher complexity opportunities,
where there are greater opportunities for innovation and
we have expertise.
The Four Forces continue to drive demand
across the market
Policy developments, geopolitics and economic events
will continue to shape our market in ways we can clearly
predict, but also in ways we cannot. Critically, what
remains consistent is the structural drivers of change.
Even if we are not able to forecast precisely ‘how’
requirements will evolve, by understanding ‘why’ our
customers choose to procure services, we are able to
create a platform that is able to adapt to meet these
changing demands.
The Four Forces, developed over a decade ago by Serco,
has been our theory of government demand. Recent
evidence suggests that this framework remains accurate:
• costs increase as demographics change and
populations grow and age, creating more complex
demands (force 1);
• but voters remain sceptical of repeated tax rises (force 2);
• however, the electorate continues to have high
expectations of services they use (force 3); and
• governments must meet them while managing ever
tighter public purses (force 4).
The private sector’s expertise, efficiency and ability to
deploy resources and capital, alongside its capacity to
innovate means our government customers will continue
to turn to us to deliver services.
The shape and type of demands may evolve, but we
continue to be confident that the foundations of our
market demand – the Four Forces – remain strong.
Our Market continued
Serco Group plc | Annual Report and Accounts 2025 | 11
The guardrails of our strategy
continue to guide us as our
organisation and market evolves.
A platform that continues to deliver
In the past decade the core tenets of our strategy have
provided a strong foundation for sustainable progress.
We continue to be a trusted business-to-government
services partner, with a broad platform of capabilities
across our sectors and geographical divisions, giving us
access to large, growing markets, while spreading and
mitigating risk. Our capital-light and technologically
agnostic operating model enables innovation and
agility, ensuring that we deliver for customers,
colleagues and shareholders alike.
This blend of broad international reach and targeted
business-to-government focus continues to give us a
competitive edge in an attractive market. Decades of
working across public services means we understand
thespecific challenges of governments; we bring
international best practice and cross-pollinate expertise
across sectors and geographies; our scale and expertise
allows us to innovate and create value for money; and
our highly skilled workforce, enabled by technology, has
a deep commitment to public service. We will continue
to leverage these sources of competitive strength as we
deliver against our strategy.
Our strategy has been distilled into our Purpose, Vision,
and Mission, and our three key priorities of Growth,
Competitiveness and Operational Excellence. We
continually seek to refine our platform across these
three areas, in turn supporting delivery of our medium-
term targets (see opposite page).
From a collection of contracts to a platform
ofcapabilities
In 2025, we demonstrated how our platform approach to
our capabilities creates value beyond individual contracts
– through bringing together the right people, partners
and technology across sectors and geographies. The
following pages set out some key examples of where
wehave done so across our key priorities: Growth,
Competitiveness, and Operational Excellence.
What all of these examples demonstrate is how, by
maturing our systems and expanding our capabilities,
we are embedding our platform for growth, rather than
simply managing a portfolio of individual contracts.
Thisapproach is well illustrated byrecent efforts in
ourtwo largest geographies – theUK & Europe and
North America – and sectors – Defence and Justice &
Immigration.
• Defence – an end-to-end personnel services offering:
our capabilities now cover every aspect of servicemen
and women’s career journeys. This has been
developed through organic expansion (for example,
via our solution for the UK’s first tri-service recruitment
system), as well as inorganic bolt-ons (most recently,
our acquisition and integration of Northrop
Grumman’s defence training business, known as
MT&S (see the Acquisition section in the Group
Review on page 23), andpartnerships including our
joint venture with Equans, VIVO, supporting the UK’s
defence estate. We can now offer a full life cycle
solution for supporting defence personnel, using our
experience and references with two of the world’s
most respected armed forces – the UK and US.
Our Strategy
Serco Group plc | Annual Report and Accounts 2025 | 12
Delivering our mission
• Immigration – building pan-European expertise: in
immigration support services, we hold a market-leading
position across multiple European geographies and the
UK. Again, this has been built through organic,
inorganic and partnership means. Most recently, we
have significantly bolstered our platform through the
integration of two acquisitions – European Homecare
Group (EHC) and ORS. We have successfully exported
their expertise – in areas such as community integration
– both across the continent and into the UK. As such, we
have been able to bring innovation and new thinking to
governments seeking to manage one of the most
prominent and complex issues of today.
Accelerating through acquisitions
Delivering sustainable, profitable organic growth is our
priority, however, leveraging our strong balance sheet to
support this through acquisitions remains an important
part of our strategy. Our long-standing criteria for
acquisitions continue to guide us in our search for
suitable targets:
1. Capability: an acquisition should enhance or add to
our offering.
2. Market access: a target should allow reach into new
geographies, sectors or customers.
3. Scale: inorganic growth should create economies
ofscale.
Recently, our focus has been in two sectors – Defence
and Justice & Immigration – where we have accelerated
our growth, increased our market share and enhanced
ourcapabilities through bolt-on acquisitions.
Excellent progress has been made with the integration of
our latest acquisition, MT&S (see the Acquisition section
in the Group Review on page 23), which we completed
in 2025. Again, building on our existing capabilities in
defence training and people services, thestrategic fit of
MT&S is clear. Thistechnology-enabled US defence asset
has opened up new high-growth, high-margin markets. As
we increasingly integrate our people and technology, the
value-add the acquisition has brought to Serco, beyond
the financial case, is increasingly evident. The highly skilled
workforce that has transitioned over has brought new
insights to existing operations and opportunities. As
such, new business wins have already been delivered
and cross-divisional opportunities are emerging.
The acquisition of MT&S comes on the back of the
previously noted successful integration of ORS (2022)
and EHC (2024). These two acquisitions not only
consolidated our position as market leaders in
immigration services across multiple European
geographies, but brought new capabilities that have
become an important part of our offering to customers.
Aligning to our M&A criteria, we will continue to look for
opportunities to bolster our growth through targeted,
bolt-on acquisitions.
Our Strategy continued
Serco Group plc | Annual Report and Accounts 2025 | 13
UK Armed Forces
Recruitment: a ground-
breaking solution driving
defence growth
The ground-breaking UK Armed Forces Recruitment (AFR)
contract, won in February 2025, will see Serco and a team
of world-leading partners develop and deliver the first-ever
unified recruitment system for the British military.
The initial £1.1bn, seven-year deal began mobilising
inApril 2025 with the new service expected to go live
in2027. When fully operational, the service is expected
to recruit more than 20,000 people annually across
theRoyal Navy, Royal Air Force, and British Army, as
wellasCyber & Specialist Operations Command, the
reserves and the Commonwealth.
As the prime contractor, we play the central role of
designer and integrator. By bringing together a range
ofworld-class partners, AFR will deliver an end-to-end
service from candidate attraction, to assessment,
enlistment, and onboarding into initial training.
The new recruitment service will operate with a blended
workforce that incorporates military and civilian
personnel. It is underpinned by best-in-class integrated
technology, designed to improve the overall candidate
experience at the same time as modernising and
accelerating the current recruitment process.
AFR’s complex requirements – spanning a public and
private sector workforce and transformation of physical
anddigital assets, alongside major process changes –
demonstrates our ability to integrate the right people,
partners and technology to create innovative, customer-
focused solutions. This is a capability we consistently
deploy not only in defence, but across our portfolio.
AFR is a central tenet of our end-to-end defence
personnel services offering – allowing us to support
those serving at every point in their military career.
Itbuilds on our extensive international experience
supporting servicemen and women, including through
our work developing the next generation of Australian
Navy sailors at HMAS Watsons Bay in Sydney; our
leading training capability gained through the
acquisition of MT&S in the US; and housing military
families through our VIVO joint venture with Equans
inthe UK.
£1.1bn
Seven-year deal
Our Strategy in action
Serco Group plc | Annual Report and Accounts 2025 | 14
Growth
Our Strategy in action continued
Serco Group plc | Annual Report and Accounts 2025 | 15
Image: LPhot Stainer- Hutchins
UK MOD © Crown copy right 2025,
is licenced under the OGL v3.0
Renewing our competitive
platform in Asia Pacific
In our 2024 Annual Report, we highlighted a ‘turnaround
plan’ for our Asia Pacific Division. Although still in progress,
we are beginning to see positive results from its execution.
Forexample, despite the ending of the Australian
Immigration contract, due to targeted measures to
manage costs and improve productivity, wehave been
able to maintain a robust divisional UOP margin at 3.7%.
Simplification has been a key principle underpinning our
plans for the region. Our divestment of our Hong Kong
operations through the sale of our small legacy transport
and facilities management business in the region is a
clear example of this strategy in action.
Equally, significant progress has been made in right-
sizing our cost base. Through a disciplined and targeted
programme, we have been able to remove waste,
optimise processes and improve productivity, while
maintaining quality in our contracts and operations.
Although there remains more work to be done to ensure
a return to sustainable growth within the Division, this year
saw material new business and retention wins. Our
improved competitiveness and digital innovation was
central to the successful bid of a significant new contract –
Justice Transport Services in Victoria, Australia.
Leveraging capabilities and expertise from our UK
Prisoner Escorting contract alongside local fleet, logistics,
and welfare innovations, this six-year deal will see us
deliver secure escort andcourt transfer services across the
state of Victoria. Equally, our retention of key operations,
such as the £41m defence training operation at HMAS
Watsons Bay in Sydney and HMAS Stirling in Western
Australia, demonstrates that we continue to have strong
value propositions and customer relations in the region.
Although the market remains relatively challenging and
our turnaround continues, we can see how our initial
reforms are leading to positive results. Robust returns,
the retention of key contracts and new business wins
demonstrate the increasing competitiveness of our
operations in the region.
Six-year deal
to deliver Justice Transport Services in Victoria, Australia
Our Strategy in action continued
Serco Group plc | Annual Report and Accounts 2025 | 16
Competitiveness
USX-1 Defiant –
‘future-defining’ ship
enters sea trials
The Serco-developed USX-1 Defiant began its first at
seatrials in 2025, in what the US Defense Advanced
Research Projects Agency (DARPA) described as
“thekind of experimentation that could define a
futurehybrid maritime fleet”.
The 55-metre, 240-metric ton ship, conceived by Serco
to “never accommodate a human aboard” is a radical
innovation in naval design. In 2025, it moved from
concept to reality, completing its first open-ocean transit,
including a five-day 1,100-mile autonomous sail to Port
Hueneme, California from Port Angeles, Washington.
Serco has led on design, engineering and integration –
bringing the USX-1 Defiant from concept to at-sea reality.
Through cutting-edge autonomy engineering, clean-sheet
vessel design and meticulous programme execution, we
have delivered a world-first Medium Unmanned Surface
Vessel (MUSV) that is reshaping how navies think about
fleet composition, survivability and cost.
During recent trials at Naval Base Ventura County
PortHueneme, Defiant successfully demonstrated
autonomous at-sea refuelling with no crew onboard.
Theteam conducted high-speed manoeuvring tests,
driving the vessel’s straight-line speed to nearly 20
knots. Using its autonomy system, Defiant also
completed multiple dockings and undockings,
as well as harbour entries and exits, with
consistent success.
The vessel is designed to operate for up to 12 months at
sea without humans, can carry up to 60 metric tons, and
transit over 7,000 nautical miles without replenishment.
These capabilities will be demonstrated and further
developed over future sea trials.
The potentially revolutionary platform, developed,
designed and operated by Serco, gives militaries greater
flexibility at reduced cost. As the ship’s abilities are
tested and refined, we will continue to bring the
operational excellence that underpins our work with
DARPA on this project to our global portfolio.
To watch the USX-1 Defiant in action visit
www.darpa.mil/research/programs/no-manning-
required-ship
Our Strategy in action continued
Serco Group plc | Annual Report and Accounts 2025 | 17
Operational Excellence
We use key
performance
indicators (KPIs)
tomonitor our
performance,
ensuring that we
have a balanced
andan appropriate
emphasis on both
financial and non-
financial aspects.
For each KPI, we explain the
relevance to our strategy and
theperformance in 2025.
Underlying operating profit
(UOP)
2025
2024
2023
2022
2021
Relevance to strategy
The level of absolute UOP and the
relationship of UOP with revenue –
i.e. the margin we earn on what our
customers pay – is at the heart of our
aspiration of profitable and
sustainable growth. We believe the
delivery of strategic success has
potential to support annual revenue
growth of 4–6%, in the medium term,
and UOP margins of 5–6%.
Performance
UOP decreased slightly by 1% to
£272m. Improvements in the
productivity and efficiency of the
business and the positive contribution
from acquisitions largely offset the
impact from higher UK National
Insurance contributions and the end
of a material contract in Australia.
Underlying earnings per share
(EPS), diluted
2025
2024
2023
2022
2021
Relevance to strategy
EPS builds on the relevance of UOP
and further reflects the strength and
costs of our financial funding and tax
arrangements. EPS is, therefore, a
measure of financial return for our
shareholders.
Performance
Diluted underlying EPS increased by
2% to 16.93p. Underlying profit after
net finance costs and tax decreased
by 3% but was supported at the EPS
level by a reduction in the weighted
average number of shares, due to
our share buybacks.
Order book
2025
2024
2023
2022
2021
Relevance to strategy
The order book reflects progress
with winning and retaining good
business and, as a store of future
value, it is a key measure to ensure
that the Group is profitable and
sustainable. The value of how much
isadded to the order book
compared to how much revenue we
are billing our customers – the book-
to-bill ratio – is important to achieving
long-term growth.
Performance
The order book remains strong and
grew 9% to £14.5bn. This excludes
unsigned extension periods, and the
order book would be £2.6bn (2024:
£3.0bn) higher if option periods in
our US business, which typically tend
to be exercised, were included.
Underlying return on invested
capital (ROIC)
2025
2024
2023
2022
2021
Relevance to strategy
ROIC measures how efficiently the
Group uses its capital to generate
returns from its assets. To be a
sufficiently profitable and sustainable
business, a return must be achieved
that is appropriately above a cost of
capital hurdle reflective of the typical
returns required by our weighting of
equity and debt capital.
Performance
ROIC decreased by 30 basis points to
25.9%. This followed the acquisition
of MT&S that increased our capital
base. The return remains significantly
above our cost of capital.
Key Performance Indicators
Serco Group plc | Annual Report and Accounts 2025 | 18
Key priorities for strategic
delivery:
Growth
Competitiveness
Operational Excellence
£272m
£274m
£249m
£237m
£229m
16.93p
16.67p
15.38p
13.91p
12.65p
£14.5bn
£13.3bn
£13.6bn
£14.8bn
£13.7bn
25.9%
26.2%
21.4%
20.6%
23.7%
Monitoring our
performance
Free cash flow (FCF)
2025
2024
2023
2022
2021
Relevance to strategy
FCF is a reflection of the
sustainability of the organisation, by
showing how much of our effort turns
into cash to reinvest for future growth
or to deploy in other ways. Our
philosophy is that we should only win
business that generates appropriate
cash returns and we apply
disciplined management of our
working capital cash flow cycles.
Performance
FCF was very strong at £219m with
trading cash conversion of 112%.
Strong cash generation has been
achieved by continued focus on the
timeliness and accuracy of issuing
sales invoices, which enables our
customers to pay us on time.
Lost time incident
frequencyrate (LTIFR)
2025
2024
2023
2022
2021
Relevance to strategy
Focusing on reducing lost time
incidents gives clear direction
towards our Zero Harm vision,
strengthening our safety culture and
ensuring our people remain safe,
healthy and able to thrive. This
supports an open culture of
continuous safety improvement
andincident reduction.
Performance
Continuing focus on reducing lost
time incidents, supported by specific
Group-wide initiatives, particularly
within contracts with the most
incidents, saw a 26% reduction
during the year in our LTIFR to 3.6.
Pipeline of large new
bidopportunities
2025
2024
2023
2022
2021
Relevance to strategy
The pipeline provides a measure of
potential for winning new business.
The size of the pipeline and our win
rate on the bids within it are at the
heart of our strategy to grow the
business.
Performance
Our pipeline of potential new
workwas £12.1bn at the end of
December, 8% higher than the
£11.2bn at the end of 2024. This
isthe highest level seen in more
thanadecade.
Employee engagement
2025
2024
2023
2022
2021
Relevance to strategy
Employee engagement reflects our
aspiration to create “a place people
are proud to work”. This is crucial to
delivering outstanding customer
service and achieving our strategic
aims including our growth targets.
Performance
Our good engagement levels
continued to be stable with a small
decline from 72 to 71 points, while
leadership engagement was
maintained at above average levels.
These results reflect the long-term
stability of engagement at Serco and
provide a foundation for further
improvement.
Key Performance Indicators continued
Serco Group plc | Annual Report and Accounts 2025 | 19
£219m
£228m
£209m
£159m
£190m
£12.1bn
£11.2bn
£10.1bn
£8.4bn
£9.9bn
71 points
72 points
71 points
70 points
70 points
3.6
4.9
6.4
5.8
4.2
Definitions for each KPI can be
found in the Glossary on pages
236 and 237.
The Other Information section
from page 232 provides further
detailed definitions and
reconciliations of our Alternative
Performance Measures (APMs).
ESG performance and disclosure
data can also be found in the Our
Impact – Data Tables on pages
238 to 243 as well as the Impact
section of our website.
We are pleased to see the strong
performance across financial and
non-financial metrics, reflecting the
hard work and dedication of all our
colleagues around the world.
Anthony Kirby Nigel Crossley
Group Chief Group Chief
Executive Financial Officer
Serco’s operations are reported
through four geographic
Divisions: North America;
UK&Europe; Asia Pacific;
andthe Middle East across
fivesectors.
2025 Highlights
Reported
revenue
Reported
operating profit
Reported
EPS, diluted
£4,877m £246m 14.07p
2024: £4,787m 2024: £130m 2024: 4.10p
Group Review
Serco Group plc | Annual Report and Accounts 2025 | 20
Defence
Justice & Immigration
Health & Other Facilities
Management
Transport
Citizen Services
Definitions for each of the Alternative Performance Measures can be found in the Glossary on pages 236 and
237. A reconciliation of each measure to the relevant statutory measure can be found on pages 232 to 234.
Strong 2025 performance, continued
momentum, new £75m share buyback
Year ended 31 December 2025 2024
Change at
reported
currency
Change at
constant
currency
Reported revenue £4,877m £4,787m 2% 3%
Underlying operating profit £272m £274m (1)% 1%
Reported operating profit £246m £130m 89%
Underlying earnings per share (EPS), diluted 16.93p 16.67p 2%
Reported EPS, diluted 14.07p 4.10p 243%
Dividend per share (recommended)
4.50p 4.16p 8%
Free cash flow £219m £228m (4)%
Net cash inflow from operating activities £447m £419m 7%
Adjusted net debt £206m £100m 106%
Reported net debt £710m £630m 13%
Revenue, underlying operating profit and underlying
earnings per share
Revenue was £4,877m, an increase of 2% compared to
the £4,787m reported in 2024, or up 3% on a constant
currency basis. Organic growth contributed 1%, with net
acquisitions and disposals adding a further 2%. This was
partially offset by a 1% currency drag. We saw strong
growth in Defence and Citizen Services, driven by the
successful integration of the Mission Training and
Satellite Ground Network Communications Software
(MT&S) business acquired in May from Northrop
Grumman and by expanded contracts in both the UK
and North America. In Justice & Immigration, revenue
was lower following the ending of our immigration
contract in Australia as well as reduced demand for
temporary accommodation in the UK.
Group underlying operating profit decreased slightly to
£272m (2024: £274m), with an increase of 1% on a
constant currency basis. There was a £5m adverse
impact from currency. Profit in the year was supported
by the contribution from MT&S and a number of
contracts either starting or moving to their operational
phase. This largely offset the impact from higher
National Insurance contributions in the UK, increased
corporate costs and the reduced activity levels in Justice
& Immigration. In Asia Pacific, we continued to make
progress, managing costs and achieving some
successful commercial outcomes. The resulting margin
for the Group of 5.6% is well within our medium-term
target of 5-6%.
Reported operating profit increased by 89% to £246m
(2024: £130m). This follows the one-off £115m
impairment charge in Asia Pacific in 2024. Underlying
profit after net finance costs and tax was £175.2m,
compared with £180.0m in 2024.
Diluted underlying earnings per share increased by 2%
to 16.93p (2024: 16.67p).
Cash flow and net debt
Free cash flow of £219m (2024: £228m) was better than
expected and represented a strong cash conversion of
112%. It follows stronger cash collection across the
business and some cash benefit of higher levels of
mobilisation activity and the associated deferred
revenue. This performance continues our strong track
record of cash generation and cash conversion, where
we have delivered over 100% conversion on average
over the last seven years. We continue to expect the
business to convert at least 80% of profit into cash on an
ongoing basis.
Average working capital days remained robust, with
debtor days of 16 (2024: 17 days) and creditor days of
20 (2024: 19 days). Including accrued income and other
unbilled receivables, days sales outstanding were 38
days (2024: 39 days). Of all UK supplier invoices, 96%
were paid in under 30 days (2024: 92%) and 99% were
paid in under 60 days (2024: 97%). No working capital
financing facilities were utilised in this or the prior year.
Adjusted net debt was £206m (2024 £100m) at the end
of the year. This was an increase of only £106m from the
prior year, despite outflows of £245m for the acquisition
of MT&S; £50m for our share buyback programme; and
£43m for dividend payments.
The year-end adjusted net debt compares to a daily
average of £232m (2024: £146m) and a peak of £465m
(2024: £212m). The difference between average and
peak figures reflects the timing of the outflow for the
MT&S acquisition. Working capital outflows that occur in
a short timeframe such as payroll, supplier payments,
and VAT payments on account also cause variability
between peak and average figures. Variances such as
these are normal for the Group.
Group Review continued
Serco Group plc | Annual Report and Accounts 2025 | 21
Cash flow and net debt continued
Our measure of adjusted net debt excludes lease
liabilities, which aligns closely with the covenants on our
financing facilities. Lease liabilities totalled £504m at the
end of December (2024: £530m), the majority relating to
leases on housing for asylum seekers under our Asylum
Accommodation and Support Services Contract. These
leases are serviced with contracted revenue from the
customer and their terms do not extend beyond the
expected life of the contract.
At the end of the period, our leverage for debt covenant
purposes was 0.7x EBITDA (2024: 0.3x), below our target
range of 1–2x and significantly below the covenant
requirements for net debt to be less than 3.5x EBITDA.
In April 2025, the Group issued US$250m (£193m) of US
private placement loan notes to support the funding of
the MT&S acquisition. The notes were split into three
series of US$100m, US$75m and US$75m with maturities
of six, eight and ten years, respectively. The weighted
average interest rate on the new loan notes was fixed at
6.23%. In October 2025, the Group repaid US$50m
(£37m) of the maturing US private placement loan notes,
which had an interest rate of 3.27%. The total amount of
US private placement loan notes in issue at the end of
December 2025 was US$550m (£409m), which had a
blended interest rate of 5.64% (December 2024: 4.88%).
Capital allocation and returns to shareholders
We aim to have a strong balance sheet with our target
financial leverage at 1–2x net debt to EBITDA.
Consistent with this, the Board’s capital allocation
priorities are to:
• invest in the business to support organic growth;
• increase ordinary dividends to reward shareholders
with a growing and sustainable income stream;
• selectively invest in strategic bolt-on acquisitions that
add capability, market access, scale and enhance the
Group’s future potential organic growth and have
attractive returns; and
• return any surplus cash to shareholders through share
buybacks or other means.
Our capital allocation framework was actively applied
in 2025:
• Invest to support organic growth: we have
strengthened our business development capabilities in
multiple ways in 2025, including through expanding
specialist sales teams, enhanced training programmes,
and refreshed government relations efforts. Deploying
new technology platforms and recruitment systems will
improve efficiency and competitiveness, while new and
expanded partnerships, such as with Mubadala in the
Middle East, will enhance future growth opportunities.
• Increase ordinary dividends: the Board is
recommending a final dividend of 3.05 pence per
share. Following the interim dividend of 1.45 pence
per share, this results in a dividend of 4.50 pence per
share, an increase of 8% compared to 2024.
• Invest in acquisitions: in May, we acquired MT&S from
Northrop Grumman. MT&S is a leading provider of
services to the US military. We continue to assess other
opportunities that are aligned to our strategy and
provide potential to enhance future organic growth.
• Return surplus cash to shareholders: our £50m share
buyback completed in the second half of the year. This
brings the total shareholder returns via buybacks since
2021 to around £390m.
Contract awards, order book, rebids and pipeline
Contract awards
Order intake was £5.5bn, up from £4.9bn in 2024,
representing a book-to-bill rate of 114%. This included
over 48 contract awards valued at £10m or more. UK &
Europe delivered an order intake of £3.7bn, or
approximately 70% of the Group’s total, while North
America contributed £1.4bn or around 25%. Asia Pacific
and the Middle East secured a combined £0.5bn.
There was a relatively even split of awards, with new
business accounting for 45% and retentions 55% of wins.
The win rate by value for new work was 32%, and 92%
for retaining existing work.
UK & Europe’s book-to-bill rate of 145% was the highest
in the Group, with significant awards in the Defence
sector. In North America, order intake of £1.4bn and a
book-to-bill of 92% was robust despite the US
Government shutdown which delayed some new
business awards and contract protest resolutions.
Group Review continued
Serco Group plc | Annual Report and Accounts 2025 | 22
In Defence, notable awards included agreements with
the UK Ministry of Defence to deliver maritime services
for the Royal Navy under the Defence Maritime Services
Next Generation programme, valued at £1bn, and a
£1.1bn seven-year contract to deliver recruitment
services for the combined armed forces in the UK. There
were also significant awards in the Defence sector in our
North America Division, including a CAD$490m 25-year
contract to support the Future Aircrew Training
programme for the Royal Canadian Air Force, and a five-
year contract to continue providing support to the US
Navy’s amphibious warfare ships and systems with an
estimated value of US$105m. In Asia Pacific, the
maritime synthetic warfare training operations contract
for the Royal Australian Navy was also secured, valued at
AUD$80m for the initial five-year period.
In Justice & Immigration we successfully rebid our
contract to manage HMP Dovegate in the UK valued at
over £500m and secured a new six-year contract in
Australia to operate Justice Transport Services in the
state of Victoria. Elsewhere, we retained or extended
contracts for guest experience at multiple airports in
Dubai (AED495m over five years) and cycle hire services
in London (£110m for the initial five years).
Order book
The order book increased to £14.5bn at the end of
December 2025 (2024: £13.3bn). Our order book
definition gives our assessment of the future revenue
expected to be recognised from the remaining
performance obligations on existing contractual
arrangements. This excludes unsigned extension
periods. The order book would be £2.6bn (2024:
£3.0bn) higher if option periods in our US business,
which typically tend to be exercised, were included. If
joint venture work was included, it would add a further
£1.4bn (2024: £1.9bn).
Rebids
In our portfolio of existing work, we have around 85
contracts with annual revenue of £5m or more where an
extension or rebid will be required before the end of
2028, with an aggregate annual revenue of £1.8bn.
Contracts that will either need to be rebid or extended in
2026 have an annual contract value of around £0.5bn.
The annual value of rebids is approximately £0.7bn in
2027 and £0.6bn in 2028.
At around 40% of the Group’s 2025 revenue, this is in
line with our normal historical ranges and includes two
rebids worth over £100m, or 2% of the Group's 2025
revenue.
New business pipeline
Our measure of pipeline includes only opportunities for
new business that have an estimated annual contract
value (ACV) of at least £10m and which we expect to bid
and to be adjudicated within a rolling 24-month
timeframe. We cap the total contract value (TCV) of
individual opportunities at £1bn, to lessen the impact of
single large opportunities. The definition does not
include rebids and extension opportunities, and in the
case of framework, or call-off, contracts such as indefinite
delivery/indefinite quantity contracts (ID/IQ), which are
common in the US, we only take the value of individual
task orders into our pipeline as the customer confirms
them. Our published pipeline is therefore a small
proportion of the total universe of opportunities, as
many opportunities exist that have annual revenues less
than £10m, are likely to be decided beyond the next 24
months, or are rebids and extensions.
Our pipeline was £12.1bn at the end of December 2025,
8% higher than the £11.2bn level at the end of
December 2024 and the highest level in over a decade.
The pipeline consists of over 70 bids, with an average
ACV of £30m and an average contract length of around
five years. The pipeline of opportunities for new business
with an estimated ACV of less than £10m totalled £3.3bn
at the end of the year (2024: £2.0bn).
To enhance future growth opportunities in the Middle
East, we expanded our strategic partnership with
Mubadala, where we will bring experience in delivering
world-class public services along with innovation and
sustainability credentials to complement their deep
regional experience, building a national champion in
facilities management in the UAE.
Acquisitions
In May, we acquired MT&S from Northrop Grumman, for
an enterprise value of £242m. MT&S generates annual
revenues of approximately US$300m, increasing the
annual revenue of our North America Division to
US$2bn. This strategic acquisition significantly enhances
Serco’s defence and space capabilities, adding
advanced mission training services and satellite ground
network software to our portfolio. It also deepens our
engagement with the US Department of War, supporting
programmes across the US Army, Space Force, Air
Force, Navy and Combatant Commands, with a team of
around 900 skilled professionals. The acquisition
supports Serco’s growth ambitions within the
international space sector, reinforcing our efforts to
expand our global footprint in regions such as the UK,
Australia and the Middle East.
Group Review continued
Serco Group plc | Annual Report and Accounts 2025 | 23
Disposals
As part of our disciplined portfolio development, in
September we sold our Hong Kong operations. The
business accounted for around 1% of Group revenue
and mainly provided tunnel support services in the
Transport sector with limited alignment to our
international portfolio.
Corporate costs
Corporate costs relate to typical central function costs of
running the Group, including executive, governance and
support functions such as HR, Legal, Finance and IT.
Where appropriate, these costs are stated after
allocation of recharges to operating Divisions. The costs
of Group-wide programmes and initiatives are also
incurred centrally.
Corporate costs increased by £6.3m to £57.4m (2024:
£51.1m) and include targeted short-term investments
and one-off costs in the year.
Guidance for 2026
Further to the Pre-Close Trading Statement on 17
December, guidance has been updated to reflect the
impact of the new £75m share buyback. This will
increase net debt and reduce the number of shares in
issue.
Revenue: We anticipate revenues of around £5.0bn.
Organic revenue growth is expected to rise to c.3%,
which excludes the annualisation of the MT&S
acquisition, the disposal of our Hong Kong operations
and transfer of certain contracts to our Mubadala
strategic partnership in the Middle East. Growth is
forecast to be strongest in North America and UK &
Europe, driven mainly by new and mobilising contracts
in Defence, Justice & Immigration and Citizen Services.
These are expected to more than offset the anticipated
reduction in Immigration revenues in UK & Europe and
Asia Pacific.
Underlying operating profit: Underlying operating profit
is anticipated to be around £300m, 10% higher than
2025. The increase includes the full-year contribution
from the acquisition of MT&S, contract ramp-ups, and
our initiatives to improve productivity and efficiencies
across the portfolio, partially offset by anticipated lower
immigration activities. This supports margin guidance of
c.6.0%, which is at the top of our medium-term target
range of 5-6%.
Net finance costs and tax: Net finance costs are
expected to be around £52m, slightly higher than 2025
due to the full-year effect of funding the acquisition of
MT&S and the new share buyback. The underlying
effective tax rate is expected to be around 25%, which is
in line with our medium-term expectations.
Financial position: Good free cash flow is expected at
around £160m in the year, in line with our medium-term
target of converting more than 80% of profit into cash.
We expect adjusted net debt to end the year at
approximately £165m following the new share buyback.
Surplus capital: Consistent with our capital allocation
priorities, we have a preferred financial leverage range
of 1-2x net debt to EBITDA. If we are below 1.0x
leverage, we consider the business to be in a position of
having surplus capital, which will be returned to
shareholders through share buybacks or other means.
As leverage finished the year at 0.72x net debt to
EBITDA, placing the business in a position of surplus
capital, a £75m share buyback has been announced and
is expected to complete by the half-year results. We will
review the capital position again at the half year.
Summary of guidance for 2026
2025 2026 2026
Actual Initial guidance New guidance
Revenue £4.9bn ~£5.0bn ~£5.0bn
Organic sales
growth
1% ~3% ~3%
Underlying
operating profit
£272m ~£300m ~£300m
Net finance
costs
£45m ~£50m ~£52m
Underlying
effective tax
rate
23% ~25% ~25%
Free cash flow £219m ~£160m ~£160m
Adjusted Net
Debt
£206m ~£150m ~£165m
NB: The guidance uses an average GBP:USD exchange rate of 1.33 in 2026,
GBP:EUR of 1.15 and GBP:AUD of 1.90. We expect a weighted average
number of shares in 2026 of 980m for basic EPS and 1,000m for diluted EPS.
Outlook for growth in the medium-term
Our medium-term targets are:
• Revenues to grow at ~4–6% per year over the
medium-term
• Profits to grow faster than revenue with margins of 5–6%
• At least 80% of profit converted into cash
• Returns to shareholders will grow faster than profits
Group Review continued
Serco Group plc | Annual Report and Accounts 2025 | 24
Revenue Underlying operating profit
2025
£4,876.8m
2024
£4,787.3m
2025
£271.6m
2024
£273.5m
£m 2025 2024 £m 2025 2024
North America
1,463.2 1,326.1
North America
143.5 136.1
UK & Europe
2,582.1 2,445.9
UK & Europe
148.9 147.9
Asia Pacific
654.6 799.4
Asia Pacific
24.0 24.6
Middle East
176.9 215.9
Middle East
12.6 16.0
Corporate costs
(57.4) (51.1)
Underlying operating profit margin
2025
5.6%
2024
5.7%
2025 2024
North America
9.8% 10.3%
UK & Europe
5.8% 6.0%
Asia Pacific
3.7% 3.1%
Middle East
7.1% 7.4%
Corporate costs
(1.1)% (1.1) %
Reflecting statutory reporting requirements, Serco’s share of revenue from its joint ventures and associates is not
included in revenue, while Serco’s share of joint ventures and associates’ profit after interest and tax is included in
underlying operating profit.
Divisional Review
Serco Group plc | Annual Report and Accounts 2025 | 25
Reporting through our
fourgeographic divisions
Year ended 31 December
£m 2025 2024 Growth
Revenue 1,463.2 1,326.1 10%
Organic change 4% 1%
Acquisitions 9% —%
Currency (3) % (4) %
Underlying operating profit 143.5 136.1 5%
Organic change 1% 2%
Acquisitions 7% —%
Currency (3) % (4) %
Margin 9.8% 10.3% (46)bp
Revenue increased by 10% to £1,463m (2024: £1,326m),
delivering a good organic growth performance of 4% in
addition to the 9% contribution from the acquisition of
MT&S. There was a 3% adverse translational effect of
currency. Organic growth was underpinned by the
Defence sector, following a significant order intake
achieved in 2024 with the mobilisation of new contracts,
including defence personnel services, as well as
increased demand and volumes for IT network and
infrastructure services for the US Navy.
Underlying operating profit increased by 5% to £144m
(2024: £136m). Organic growth was 1% with the
acquisition of MT&S contributing 7%, and a 3% drag
from currency. There was progress in the Defence sector
including the mobilisation of new contracts, expansion
and higher volumes on existing business, as well as
efficiencies in our case management portfolio. Margins
decreased from 10.3% to 9.8%, with some contracts in
the early mobilisation phase as well as the acquisition
and integration costs related to the MT&S transaction.
Order intake of £1.4bn was robust, with a book-to-bill
rate of 92%. This followed the very high level of contract
awards in 2024, resulting in fewer bids concluding in the
first half of 2025 as the pipeline was replenished. In the
second half, the US Government shutdown caused some
delays to new business awards and contract protest
resolutions, although our win rates by value remained
healthy at 37% for new business and 75% for retentions.
Our largest new win was a CAD$490m, 25-year contract,
to provide critical training enablers, including air
navigation services, air traffic control and other site
services for the Future Aircrew Training programme in
Canada. We also secured a US$105m, five-year contract,
to continue providing support to the US Navy’s
amphibious warfare ships and systems with services
including engineering, ship design management and
integrated logistics support.
There has been an efficient transition and integration of
the MT&S acquisition into the business, which
contributed £9m in the seven months of ownership after
£6m of transaction and integration costs.
The pipeline of new bid opportunities due for decision
within the next 24 months has more than doubled from
£2.1bn at the end of 2024 to £5.0bn. The pipeline was
replenished after the high level of contract awards in the
prior year and fewer award decisions following the US
Government shutdown, which prompted a short term lag
between spending commitments and opportunities
being realised. Defence continues to represent the
majority of the North American pipeline and remains our
priority sector in the region, supported by the world’s
largest defence budget, strong bipartisan commitment to
enhanced readiness, and a clear strategic focus on
strengthening military capabilities. Serco is well
positioned to compete and succeed in this highly liquid
market, and we have confidence in the long-term growth
potential of the sector.
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 26
North America
Share of Group
revenue
Share of
underlying
operating profit
30%
44%
2024: 28% 2024: 42%
SkyAlyne / CAE
Year ended 31 December
£m 2025 2024 Growth
Revenue 2,582.1 2,445.9 6%
Organic change 5% (5)%
Acquisitions 1% 5%
Currency —% —%
Underlying operating profit 148.9 147.9 1%
Organic change (2)% 7%
Acquisitions 2% 16%
Currency 1% (1)%
Margin 5.8% 6.0% (28)bp
Revenue rose by 6% to £2,582m (2024: £2,446m),
driven by good organic growth of 5% and a further 1%
uplift from the acquisition of EHC, our German
immigration services business. Organic growth was
supported by the mobilisation and ramp-up of several
major Defence and Citizen Services contracts. As
expected, Justice & Immigration revenue reduced within
our UK immigration contract, although the contract
remains the largest in the Group.
Underlying operating profit increased by £1m to £149m
(2024: £148m) reflecting a resilient performance in the
face of higher UK National Insurance contributions.
Margins remained healthy at 5.8% (2024: 6.0%) supported
by the mobilisation of early delivery phases from new
contracts within complex case management and marine
services. As expected, Justice & Immigration profitability
reduced due to lower demand in the immigration
portfolio. After an extended period of mobilisation and
higher costs, our Electronic Monitoring Services contract
delivered productivity improvements in the second half.
We expect these to continue and to contribute to a better
financial performance in 2026. Demand for our European
space business remained strong.
Underlying operating profit includes the profit
contribution of joint ventures, from which interest and
tax have already been deducted. If the proportional
share of revenue from joint ventures was included and
the share of interest and tax cost was excluded, the
overall Divisional margin would have been 5.1%
(2024:5.3%).
Order intake was very strong at £3.7bn, around two-
thirds of the Group total, with a book-to-bill of 145%. In
2025, new work accounted for approximately 42% of
order intake, with a high win rate by value of around
60%. We have also maintained our momentum on
securing rebids and extensions, with a win rate over
97%. Awards included three agreements with the UK
Ministry of Defence to deliver maritime services for the
Royal Navy, with an estimated value of £1.0bn over a
term of up to 10 years. This is in addition to the new
£1.1bn seven-year Armed Forces Recruitment (AFR)
contract which is in the early stages of mobilisation. We
successfully rebid or extended contracts for cycle hire
services in London and environmental waste, as well as
retaining the contract to manage HMP Dovegate with an
estimated value of over £500m.
The pipeline remains healthy at £5.8bn (2024: £6.4bn)
despite the high level of awards and conversion rate in
the year. Our opportunities are broad, covering the key
sectors we operate in, including Defence, Justice &
Immigration and Citizen Services.
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 27
UK & Europe
Share of Group
revenue
Share of
underlying
operating profit
53%
45%
2024: 51% 2024: 46%
Year ended 31 December
£m 2025 2024 Growth
Revenue
654.6 799.4 (18) %
Organic change
(12) % (2) %
Disposals
(1) % —%
Currency
(5) % (3) %
Underlying operating profit
24.0 24.6 (2)%
Organic change
5% 8%
Disposals
(2) % —%
Currency
(5) % (4) %
Margin
3.7% 3.1% 59bp
Our Asia Pacific business continued its turnaround
following progress made in 2024 and the successful
transition out from providing onshore immigration
services in Australia, historically the largest contract for
the Division. Revenue fell 18% to £655m (2024: £799m),
driven by a 12% organic decline following the exit of the
immigration contract, though Defence and Justice
delivered good contract growth. As part of our
disciplined portfolio development, we sold our Hong
Kong operations in September. The business mainly
provided tunnel support services to the Transport sector
with limited alignment to our international portfolio.
Adverse currency movements had a 5% impact overall.
Operational excellence remained a core focus
throughout the year, and improvements across our
contract portfolio and cost base helped mitigate most of
the impact from lower revenue. This supported the
margin improvement to 3.7% (2024: 3.1%) even with
underlying operating profit reducing 2% to £24m (2024:
£25m). Actions to streamline the business included
reducing overhead and operating costs, enhancing
workforce efficiency and some improved commercial
outcomes. This now better positions the region for a
return to growth in the medium-term.
Rebuilding the business development pipeline continues
to be our priority, supported by increased investment in
growth-focused resourcing during the year. Order intake
of £0.3bn was mostly secured in the second half,
including a new six-year contract to operate Justice
Transport Services in the state of Victoria. A number of
important extensions and rebids were secured, including
an initial five-year contract to continue providing
maritime warfare training services at HMAS Watsons Bay,
Sydney and HMAS Stirling, Western Australia – the
country’s naval warfare training establishments. In Citizen
Services we successfully rebid a AUD$40m two-year
contract to provide services for the Victorian Police
Assistance Line, as well as a four-year extension to the
road safety services contract for the Victorian
Department of Justice and Community Safety, valued at
over AUD$190m in Justice. The pipeline closed at
£0.7bn (2024: £1.7bn), reflecting the impact of the
unsuccessful facilities management services bid for the
Australian Defence Force in the first half.
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 28
Asia Pacific
Share of Group
revenue
Share of
underlying
operating profit
13%
7%
2024: 17% 2024: 8%
IMAGE TBC
Year ended 31 December
£m 2025 2024 Growth
Revenue
176.9
215.9
(18) %
Organic change
(12) %
(3) %
Net (disposals)/acquisitions
(4) %
1%
Currency
(2) %
(3) %
Underlying operating profit
12.6
16.0
(21) %
Organic change
(18) %
—%
Net (disposals)/acquisitions
—%
9%
Currency
(3) %
(4) %
Margin
7.1%
7.4%
(29)bp
Revenue reduced by 18% to £177m (2024: £216m)
largely driven by an organic decline of 12%, and 2%
adverse currency movement. The conclusion of our air
navigation contract in Dubai reduced revenue during the
year. This was partially offset by continued growth in our
fire and rescue services in Saudi Arabia and demand for
our defence support services. Following the strategic
partnership with Mubadala, certain contracts have
novated to a new joint arrangement, resulting in a
revenue reduction of approximately 4% with no impact
on underlying operating profit.
Underlying operating profit decreased by 21% to £13m
(2024: £16m). Operating margin decreased by 29bps to
7.1% (2024: 7.4%) due to completion of higher margin
project works in 2024. We have adopted a disciplined
approach to bidding, improving the underlying
performance of our portfolio over the longer term and
other operational efficiencies.
Order intake was approximately £0.1bn and includes a
strategically significant contract extension with Dubai
Airports, valued at AED495m, which will run until
December 2030. This five-year extension reinforces our
long-standing role in enhancing the guest experience at
Dubai Airports and follows the successful delivery of its
initial five-year term.
Our pipeline of new bid opportunities in the Middle East
sits at approximately £0.5bn (2024: £1.0bn), lower than
the prior year following the adjudication of several large
bids and removal of some delayed and cancelled
opportunities. We continue to see robust demand across
our markets, particularly within the Defence sector and
also in Saudi Arabia. To accelerate growth and
strengthen our regional market position, our strategic
partnership with Mubadala will provide us with greater
access to new commercial opportunities, enhancing our
long-term prospects in the region.
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 29
Middle East
Share of Group
revenue
Share of
underlying
operating profit
4%
4%
2024: 4% 2024: 4%
For the year ended 31 December
Underlying
Non-
underlying
items Reported Underlying
Non-
underlying
items Reported
2025 2025 2025 2024 2024 2024
£m £m £m £m £m £m
Revenue 4,876.8 — 4,876.8 4,787.3 — 4,787.3
Operating profit/(loss) 271.6 (25.3) 246.3 273.5 (143.4) 130.1
Margin 5.6% 5.1% 5.7% 2.7%
Net finance costs (44.8) — (44.8) (33.1) — (33.1)
Profit/(loss) before tax 226.8 (25.3) 201.5 240.4 (143.4) 97.0
Total tax (charge)/credit (51.6) (4.3) (55.9) (60.4) 7.9 (52.5)
Effective tax rate 22.8% 27.7% 25.1% 54.1%
Profit/(loss) for the year 175.2 (29.6) 145.6 180.0 (135.5) 44.5
Basic EPS 17.31p 14.38p 16.97p 4.17p
Diluted EPS 16.93p 14.07p 16.67p 4.10p
Non-underlying items
Non-underlying items in the year were a charge net of
tax of £29.6m (2024: £135.5m). This comprises
amortisation and impairment of intangible assets arising
on acquisitions of £30.0m (2024: £28.9m), profit on
disposal of a subsidiary in Hong Kong of £4.7m (2024:
£nil) and non-underlying tax for the year being a charge
of £4.3m (2024: credit £7.9m). The non-underlying tax
charge includes £17.3m relating to the derecognition
ofpart of the deferred tax asset in Asia Pacific. For more
details see page 171.
In 2024, a non-cash, non-underlying impairment
chargeof £114.5m was recognised against Asia Pacific
goodwill, following the loss of the Immigration rebid in
November 2024.
Finance costs and investment revenue
Net finance costs recognised in the income statement
were £44.8m (2024: £33.1m), consisting of investment
revenue of £6.8m, less finance costs of £51.6m.
Investment revenue of £6.8m (2024: £7.7m) includes
interest accruing on net retirement benefit assets of
£0.8m (2024: £1.9m), and interest income of £5.7m
(2024: £5.3m).
Finance costs of £51.6m (2024: £40.8m) include interest
incurred on loans, primarily the US private placement loan
notes and the revolving credit facility of £23.9m (2024:
£14.7m), and lease interest expense of £22.9m (2024:
£19.9m), as well as other financing related costs including
the impact of foreign exchange on financing activities.
The increase in loans year-on-year is due to the issue of
further US private placement loan notes in the year.
The increase in lease interest expense year-on-year is
primarily due to the continuing increase in the number
ofleases for dispersed properties required for our UK
asylum accommodation contract.
Net interest paid recognised in the cash flow statement
was £40.3m (2024: £28.5m), consisting of interest
received of £5.7m (2024: £5.3m) less interest paid of
£46.0m (2024: £33.8m).
Joint ventures and associates – share of results
During the year, the most significant joint ventures
andassociates in terms of scale of operations were
Merseyrail Services Holding Company Limited
(Merseyrail) and VIVO Defence Services Limited (VIVO).
Both are incorporated and operated in the UK.
Merseyrail generated revenue of £227.9m (2024:
£215.0m), with the Group’s share of profits net of interest
and tax for the year being £11.5m (2024: £10.9m). The
increase in Merseyrail revenue and profits is primarily
due to improved performance in 2025. The Group
received dividends of £8.5m (2024: £14.1m).
VIVO revenue for the year was £822.8m (2024: £917.8m)
with the Group’s share of profits net of interest and tax
for the year being £15.0m (2024: £11.9m). The decline
inVIVO’s revenue is largely due to lower variable work
volumes within VIVO’s accommodation contract for
which the Group receives a smaller share of profits.
Theincrease in profit is due to the mix of margins within
different contracts. The Group received dividends of
£14.2m (2024: £16.7m).
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 30
Other financial information
While the revenues and individual line items are not
consolidated in the Group Consolidated Income
Statement, summary financial performance measures
forthe Group’s proportion of the aggregate of all joint
ventures and associates are set out below for
informationpurposes.
For the year ended 31 December
2025
£m
2024
£m
Revenue 514.7 504.5
Operating profit
37.5
30.6
Net finance income/(cost) 0.5 (0.1)
Income tax charge (9.2) (7.7)
Profit after tax 28.8 22.8
Dividends received from joint ventures 22.9 30.8
Tax
Underlying tax
The underlying tax charge recognised in the year was
£51.6m (2024: £60.4m). The effective tax rate of 22.8% is
lower than in 2024 (25.1%). The decrease compared with
2024 is primarily due to one-time credits for the release
of tax provisions following finalisation of overseas tax
authority audits, and a credit on securing other tax
repayments previously too uncertain to recognise. In
contrast, 2024 included increases in provisions reflecting
tax authority audit outcomes.
The underlying tax rate of 22.8% is lower than the UK
statutory rate of 25%. This is due to the impact of profits
of joint ventures and associates whose post-tax profits
are included in the Group’s profit before tax (decreasing
the rate by 3.2%), and prior year adjustments, primarily
arising from the decrease in provisions held for uncertain
tax positions (decreasing the rate by 2.1%). These are
partially offset by current year movements of uncertain
tax positions (increasing the rate by 0.9%); the
movement in unprovided deferred tax (increasing the
rate by 0.9%); withholding taxes suffered to the extent no
tax benefit is expected (increasing the rate by 0.4%);
together with the impact of higher statutory rates of tax
on overseas profits (increasing the rate by 0.5%). Other
smaller items result in a net increase to the rate of 0.4%.
Non-underlying tax
A tax credit of £8.1m (2024: £7.9m) arises from the
amortisation and impairment of intangibles arising
onacquisition.
The accounting profit on disposal of £4.7m did not
giverise to a taxable profit and therefore does not result
inatax cost.
The partial derecognition of the deferred tax asset in
Asia Pacific resulted in a tax charge of £17.3m. For more
details see page 171. Netting against this is a £4.9m
prior year credit arising on the recalculation of a
deferred tax liability connected with a historic acquisition
in the US.
Deferred tax assets
As at 31December 2025, the Group has recognised a
net deferred tax asset of £167.1m (2024: £177.7m). This
consists of a deferred tax asset of £208.2m (2024:
£229.8m) and a deferred tax liability of £41.1m (2024:
£52.1m). A £175.7m UK deferred tax asset (2024:
£177.5m) has been recognised on the Group’s balance
sheet at 31December 2025 on the basis that the
performance in the underlying business indicates
sustained profitability which will enable the accumulated
tax losses to be utilised.
As detailed on page 171, a £27.7m Australian deferred
tax asset (2024: £50.5m) has been recognised on the
basis of forecast profits capped – during its turnaround
phase – to the ordinary five-year planning cycle of the
business. Asthe turnaround of the Australian business
progresses, management will continue to reassess
thisjudgement.
Taxes paid
Net corporate income tax of £43.4m (2024: £41.3m) was
paid during the year. The UK has a net repayment of
£12.9m in the year, which consisted of £2.4m payments
to HMRC, offset by £14.6m received from the Group’s
joint ventures and associates for losses sold to them and
£0.7m of withholding tax refunds. Payments relating to
the Group’s operations outside the UK were: Europe
(£24.9m), North America (£28.7m), Asia Pacific (£1.7m),
and the Middle East (£1.0m).
Total tax contribution
The Group’s published tax strategy of paying the
appropriate amount of tax as determined by local
legislation in the countries in which it operates means
that a variety of taxes are paid across the globe. To
increase the transparency of the Group’s tax profile,
thecash taxes that have been paid across its regional
markets are shown below.
In total during 2025, Serco globally contributed
£1,038.8m of tax to governments in the jurisdictions
inwhich it operates.
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 31
Taxes by category
Taxes
borne
£m
Taxes
collected
£m
Total
£m
Corporate Income Tax 58.6 — 58.6
VAT and similar 7.3 314.9 322.2
People Taxes 206.6 433.5 640.1
Other Taxes 16.3 1.6 17.9
288.8 750.0 1,038.8
Taxes by region
Taxes
borne
£m
Taxes
collected
£m
Total
£m
UK & Europe 188.9 463.1 652.0
Asia Pacific 23.7 145.6 169.3
North America 74.1 136.0 210.1
Middle East 2.1 5.3 7.4
288.8 750.0 1,038.8
Corporation tax, which is the only cost to be separately
disclosed in our Annual Report, is only one element of
the Group’s tax contribution. For every £1 ofcorporate
tax paid directly by the Group (tax borne), afurther £3.93
is borne in other business taxes. The largest proportion
of these is in connection with employing people.
In addition, for every £1 of tax borne, £2.60 is collected
on behalf of national governments (taxes collected). This
amount is directly impacted by the number of people
employed and the sales made.
Treasury risk management and operations
The Group’s operations expose it to a variety of financial
risks that include access to liquidity, the effects of
changes in foreign currency exchange rates, interest
rates and credit risk. The Group has a centralised
treasury function whose principal role is to seek to
ensure that adequate liquidity is available to meet the
Group’s funding requirements as they arise and that the
financial risk arising from the Group’s underlying
operations is effectively identified and managed.
Treasury operations are conducted in accordance with
policies and procedures approved by the Board which
are reviewed annually. Financial instruments are only
used for hedging purposes and speculation is not
permitted. A monthly report is provided to senior
management outlining performance against key risk
management metrics, as required by the Treasury Policy.
Liquidity and funding
As at 31December 2025, the Group had committed
funding of £758.6m (2024: £629.2m), comprising
£408.6m of US private placement loan notes, and a
£350m revolving credit facility which was undrawn.
TheUS private placement loan notes are repayable in
bullet payments between October 2027 and April 2035.
The Group does not engage in any external financing
arrangements associated with either receivables
orpayables.
In April 2025, the Group issued US$250m (£193m) of US
private placement loan notes to support the funding of
the MT&S acquisition. The notes were split into three
series of US$100m, US$75m and US$75m with maturities
of six, eight and ten years, respectively. The weighted
average interest rate on the new loan notes was fixed at
6.23%. In October 2025, the Group repaid US$50m
(£37m) of the maturing US private placement loan notes,
which had an interest rate of 3.27%. The total amount of
US private placement loan notes in issue at the end of
December 2025 was US$550m (£409m), which had a
blended interest rate of 5.64% (December 2024: 4.88%).
The Group’s revolving credit facility provides £350m of
committed funding for five years from the arrangement
date in November 2022. The facility includes an
accordion option, providing a further £100m of funding
(uncommitted and therefore not incurring any fees) if
required without the need for additional documentation.
This option has not been included in the Group’s
assessment of available liquidity as approvals are
required to access the funding.
Interest rate risk
The Group has a preference for fixed rate debt to reduce
the volatility of net finance costs. The Group’s Treasury
Policy requires it to maintain a minimum ratio of fixed
rate debt to overall adjusted net debt, not to be lower
than 50%, and for this proportion to increase as the ratio
of EBITDA to interest expense falls. As at 31December
2025, £408.6m of debt was held at fixed rates and
adjusted net debt was £205.7m.
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 32
Foreign exchange risk
The Group is subject to currency exposure on the
translation to Sterling of its net investments in overseas
subsidiaries. The Group seeks to manage this risk, where
appropriate, by borrowing in the same currency as those
investments. Group borrowings are predominantly
denominated in Sterling and US Dollars. The Group seeks
to manage its currency cash flows to minimise foreign
exchange risk arising on transactions denominated in
foreign currencies and uses forward contracts where
appropriate to hedge net currency cash flows.
Credit risk
Cash deposits and in-the-money financial instruments
give rise to credit risk on the amounts due from
counterparties. The Group manages this risk by adhering
to counterparty exposure limits based on external credit
ratings of the relevant counterparty.
Net assets
As at 31December 2025, the Consolidated Balance
Sheet shown on page 153 had net assets of £873.6m, a
movement of £31.1m from the closing net asset position
of £842.5m as at 31December 2024. This increase is a
result of total comprehensive income in theperiod of
£128.5m partially offset by returns to shareholders
totalling £93.6m, through share buybacks and dividend
payments.
Key movements since 31December 2024 on the
Consolidated Balance Sheet shown on page 153 include:
• An increase in goodwill of £103.1m driven by £140.8m
recognised on acquisition of MT&S, offset by £37.7m
of adverse foreign exchange.
• An increase in other intangible assets of £60.8m,
including £89.3m arising on acquisition of MT&S,
partly offset by amortisation of £37.7m.
• A decrease in the net retirement benefit asset of
£2.5m. Further details are provided in the pensions
section below.
• Provisions have decreased by £1.5m predominantly
due to the elimination of provisions of the disposal of
Hong Kong of £4.2m.
• Cash and cash equivalents have increased by £16.3m.
In the year the Group generated free cash flow of
£219.3m and £156.0m from the net advance of loans.
This was partially offset by £50.3m shares repurchased,
£43.3m dividends to shareholders and £245.3m
related to the acquisition of MT&S.
• Loan balances have increased by £128.5m due to the
issue of additional USPP notes of £193.0m, and offset
by repayments of £37.2m and FX of £26.5m.
• The movement in contract assets, trade receivables
and other assets, and, contract liabilities, trade
payables and other liabilities are as a result of normal
working capital movements.
Pensions
Serco’s pension schemes had an accounting surplus
before tax of £1.5m (31December 2024: £4.0m). The
£2.5m decrease comprises a £39.3m reduction in
scheme assets due to market conditions lowering asset
values. This was largely offset by a £36.8m reduction in
scheme liabilities, driven by changes in inflation,
discount rates and updated member data.
The SPLAS 2024 triennial actuarial funding valuation was
approved on 4 July 2025 and continues the Group
commitment from the 2021 valuation to make deficit
recovery payments of £6.6m per year until March 2030.
The opening net asset position led to a net interest
income within net finance costs of £0.8m (2024: £1.9m).
Divisional Review continued
Serco Group plc | Annual Report and Accounts 2025 | 33
Our ESG Framework aligns with
our Purpose to impact a better
future across three core pillars –
People, Place and Planet – for
our colleagues, communities
and the environment.
Our strategic priorities are outlined within each pillar
along with the most material topics for our stakeholders
and our business. Collaboration with our customers,
supply chain and communities is central to our
approach, and our engagement activities support
meaningful progress towards our Purpose.
Serco’s responsible business foundations underpin our
approach and reflect our commitment to integrity and
ethical decision-making.
Our material topics were reinforced through our 2025
Double Materiality Assessment (DMA), and aligned with
Group-wide strategies including our People and Culture
strategy, to support our key priorities of Growth,
Competitiveness and Operational Excellence.
We recognise the strategic relevance of material ESG
topics to Serco’s long-term success. Key ESG metrics are
embedded into our performance management system
and linked directly to leadership and executive
remuneration. ESG performance accounted for 15% of
the 2025 annual bonus (Employee safety and Employee
retention) and 10% of the 2025 Long-Term Incentive
Plan(LTIP) awards (Employee engagement and
Environmental impact), reinforcing our focus on the
safety, wellbeing, engagement and retention of our
colleagues, and on the environment.
Impact report
Serco Group plc | Annual Report and Accounts 2025 | 34
Sustainable third-party relationships | Sustainable procurement | Partnerships
We strive to act with integrity in all that we do. Everyone plays their part in complying with mycode (our
Code of Conduct), policies and responsible business procedures - on everything from data privacy and
information security, to ethics and integrity, human rights and the prevention of modern slavery.
Material topics
• Safe operations and
wellbeing
• Diverse workforce and
inclusive workplace
• Colleague experience
Material topics
• Service impact
• Community impact
Material topics
• Carbon and climate
• Environmental protection
including supporting nature
• Efficient use of resources
Driving positive impact for
people, place and planet
Read more in our Directors’ Remuneration
Report on page 105.
Read more on our
progress on page 45.
Read more on our
progress on page 37.
Read more on our
progress on page 49.
In 2025 we refreshed our DMA, taking a more comprehensive
approach to identifying and assessing impacts, risks and
opportunities (IROs) in each high-level material topic.
This approach provided a robust assessment of the
materiality of each topic to prepare for compliance with
the Corporate Sustainability Reporting Directive (CSRD),
expected to come into force for Serco for financial
year2028.
The review of our DMA took a data-driven approach in
partnership with Datamaran. Their platform was utilised
to assess the financial and impact materiality of a long list
of sustainability topics based on their association with
regulatory requirements, voluntary frameworks and
publicly available information related to Serco’s sectors,
countries of operation, supply chain and customers.
The long list of topics assessed as most significant were
reviewed and consolidated into a short list of material
topics which inform our ESG Framework
IROs within each topic were identified, reviewed and
assessed by Group and regional SMEs, with the results
used to inform the materiality scores for each topic.
The results were cross-checked against our principal
risks to ensure that there were no material gaps, and
thatthere was completeness and consistency, before
being validated bythe ExCo and Corporate
Responsibility Committee.
We continue to engage with our shareholders,
colleagues, customers, suppliers and partners,
communities and societies. This ensures our ESG
priorities support continual improvement of our
responsible business foundations. This drives our key
priorities of Growth, Competitiveness and Operational
Excellence in line with our strategy.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 35
Our approach to materiality
Our approach to reporting
Our transparent and strategic approach to reporting is designed to provide stakeholders with clear insights and
reflect our priorities, performance and ambition across all material areas of ESG. Our reporting and disclosures reflect
regulatory requirements and external stakeholder expectations.
In 2025, having refreshed our DMA, we also reviewed and consolidated our ESG performance data points, reducing
the number of items reported in both the performance tables in this report (see page 238) and our associated ESG
Data Book, to focus on reporting requirements and material topics important for Serco and our stakeholders.
ESG ratings and sustainability indices
On an annual basis we participate in a select number of ESG rating questionnaires and sustainability indices.
Thetable below outlines our latest scores. In 2025, we improved our ISS, EcoVadis and CDP scores.
ESG ratings/Sustainability indices Scale 2025 2024 2023
Score
change
MSCI* AAA to CCC, AAA as a best possible score A A BBB
Sustainalytics* 0–100, 0 as a best possible score 18.4 18.4 21
ISS ESG Corporate Rating* A+ to D-, A+ as a best possible score C+ C C
S&P Global CSA* Ranking of companies, 100 as a best possible score 54 57 48
FTSE Russell ESG Score** 0–5, 5 as a best possible score 4.5 4.5 4.1
EcoVadis 0–100, 100 as a best possible score 65 60
–
Workforce Disclosure
Initiative**
Number of questions with a meaningful response
expressed as a percentage, 100% as a best possible score 88% 88% 93%
CDP A–F, A as a best possible score A A- B
Score change key:
Increase Decrease No change
The following ratings were sourced/updated on the specific dates below:
* MSCI (3/12/25), Sustainalytics (23/12/25), ISS ESG corporate rating (9/12/25), S&P Global CSA (17/12/25).
** 2025 scores were not available in time for publication, and will be updated in future on the Impact section
ofourwebsite.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 36
For more information visit
serco.com/our-impact/performance
For more information visit
serco.com/our-impact
People
Building the capability and culture that
enablesperformance
Across Serco’s global operations, colleagues deliver vital public
services in complex environments. Our performance and long-term
growth depend on the strength, engagement and professionalism
of our workforce. Our focus is on building and sustaining the skills,
leadership and culture to meet the evolving expectations of
customers, communities and markets, enabling colleagues to thrive.
In 2025, our People and Culture strategy continued to
mature as a core enabler of Growth, Competitiveness and
Operational Excellence. Its six pillars underpin our focus
on developing the right skills, leadership and culture to
drive long-term value for customers, communities and
shareholders. Our Values of Trust, Care, Innovation and
Pride define our culture and behaviour.
Our ability to grow depends not only on the scale of our
operations, but on the quality, resilience and alignment
of our people. That is why we have focused on
improving the systems, leadership and capabilities that
underpin workforce effectiveness, strengthening our
foundations as an agile, productive and performance-
driven organisation.
In recognition of these efforts, in 2025 Serco secured top
prize as Britain’s most admired company in its sector,
was ranked among the top 1% of global leading
employers, recognised among the UK’s leading
employers of veterans, and retained Tier 1 status in the
CCLA Corporate Mental Health Benchmark for the fourth
consecutive year. Together, these independent
assessments reflect sustained progress in colleague
experience, inclusion, wellbeing and leadership.
2025 Highlights
39%
reduction in Lost Time Incidents
(LTIs) (versus 2023 baseline)
49%
reduction in Lost Working Days
(LWDs) (versus 2023 baseline)
34%
women in global senior
leadership
28.7%
reduction in voluntary attrition
(versus 2023 baseline)
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 37
Productivity & Performance Impact
The six pillars create a unified framework for achieving
operational excellence, cultivating an inclusive and
growth-oriented culture, enhancing our operational
competitiveness.
With labour markets competitive and service requirements
evolving, we are focusing on areas that drive most impact:
• strengthening recruitment;
• modernising performance systems and technology;
• supporting wellbeing and safety, and
• reinforcing the leadership behaviours needed
forsuccess.
Taken together, this integrated approach is helping
Serco respond to changing customer needs, manage
risk more effectively, and operate with greater efficiency
and impact.
Strengthening talent to drive growth
Talent attraction, recruitment and retention
Highlights
~34k
13%
interviews
scheduled through
automation
(annualised)
reduction in global
recruitment
headcount
28.7%
~3,400
reduction in
voluntary attrition
over two years (from
26.1% to 18.6%)
additional
colleagues retained
(annualised)
Our global recruitment teams have taken a decisive step
forward, transforming how Serco attracts, recruits and
retains the best talent in increasingly competitive labour
markets through the accelerated global implementation
of Phenom, a market-leading, AI-driven talent
intelligence platform. Use of Phenom has supported
recruitment’s role as a strategic, data-led capability,
delivering a consistent, high-quality experience for
candidates and hiring leaders across the Group.
AI-enabled sourcing, screening and engagement
capabilities are introducing automation at scale,
supporting faster, more informed hiring decisions,
reducing reliance on agency recruitment and improving
early-tenure retention in critical roles. We have simplified
our technology landscape, strengthened data quality
and created a foundation for more sophisticated
workforce planning.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 38
The six pillars of our People and
Culturestrategy
These changes are evolving Serco’s talent model, delivering measurable efficiency gains, improved retention outcomes
and a materially enhanced ability to mobilise at pace, compete for new work and support sustainable, long-term growth.
In 2025, we implemented Grow with Serco, a coherent, end-to-end framework to enhance how we develop and retain
talent across the Group. It brings capability, leadership, performance and succession into a single, integrated model,
aligned to our growth ambitions and the evolving needs of the business. By creating clear expectations, development
pathways and progression opportunities, Grow with Serco strengthens organisational capability and supports
consistent, sustainable performance.
Performance and talent development
Highlights
First
cohort
License
toLead
participated in
Rising Stars
development
programme
programme
launched in UK &
Europe, Asia Pacific
and Middle East
35,000+
23,000
learning hours
delivered through
leadership
development
objectives and 3,000
development goals
recorded in the
Talent Hub
Our focus this year has been on improving talent
outcomes by embedding stronger systems, leadership
expectations and performance standards. By enhancing
alignment between individual contribution and business
priorities, we are creating a more capable, resilient and
performance-driven workforce, one that can scale
effectively and compete in complex markets.
In 2025, the launch of a new Talent Hub provided a
single global reference point for performance objectives,
development plans and year-end reviews. With over
23,000 objectives and 3,000 development goals
captured, the platform is supporting improved clarity
and development planning.
We have strengthened leadership and succession
through the continued roll-out of License to Lead
(35,000+ learning hours) and Rising Stars for high-
potential talent, alongside refreshed performance and
reward frameworks aligned to outcomes, behaviours
and long-term retention. These initiatives are building
momentum and improving productivity across regions.
• Voluntary attrition has declined by 28.7% over the past
two years, falling from 26.1% at the end of 2023 to
18.6% by the close of 2025.
• This improvement has resulted in the retention of
more than 3,400 additional colleagues annually,
reducing turnover-related disruption and
strengthening continuity across our operations.
These gains reflect a sharper focus on hiring quality,
onboarding, leadership expectations and colleague
experience, contributing directly to greater workforce
stability and productivity. By embedding a unified
approach to performance, development and
recruitment, we are reinforcing the talent infrastructure
needed to support long-term growth and deliver
sustained value for our customers and communities.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 39
Strengthening talent to drive growth continued
In 2025, we continued to
strengthen the link between
workforce stability, safety and
operational excellence, enabling
us to scale reliably and deliver
consistent, high-quality services
across our global operations.
Operational excellence relies upon how effectively
wemanage risk, reinforce behavioural standards and
support our people to deliver. That is why we have
continued to invest in leadership, technology and
capability-building to reduce incidents and strengthen
our safety culture across all sectors and Divisions.
Safe operations
Highlights
39%
49%
reduction in LTIs
against 2023
baseline
reduction in days
lost to LTIs against
2023 baseline
Psychological Consequence
LTI metric
launched internally to monitor psychosocial risks
As voluntary attrition has declined over two years, days
lostto LTIs fell by 49%, from 14,341 to 7,324. These twin
improvements are closely linked: more stable, better-
equipped teams reduce avoidable risks and support safer,
more consistent delivery of services for our customers.
We continue to develop our understanding of risk
indicators and trends through improved use of data and
reporting. This has enabled us to focus on proactive
mitigation in high-risk settings within which we operate.
• In Justice & Immigration, we have expanded use of
body-worn cameras and rigid handcuffs and refreshed
prevention training for colleagues.
• Digital monitoring and technology-enabled risk
management systems support earlier risk identification
and faster intervention, helping protect colleagues and
service users.
• In North America, Samba Safety telematics provides
real-time visibility of driving risks.
• In the UK, additional vehicle safety lighting was
introduced in Environmental Services fleets to improve
frontline protection in dynamic operating conditions.
• In 2025, we launched a new ‘Psychological
Consequence LTI’ metric internally to monitor
psychosocial risks in our operations with the same
forensic rigour as physical risks.
Following a Group-wide competence review,
welaunched new multi-level safety leadership training
within our License to Lead programme. Thisfocuses on
ownership, accountability and culture, reinforcing safety
as a leadership priority.
Our cultural commitment to safety is also reinforced
through organisation-wide awareness campaigns.
OurZero Harm vision, supported by Zero Harm Week,
World Safety at Work Day and Divisional safety
campaigns, supports visibility, reflection and behavioural
engagement. This year, we were again recognised in
theUK at the 2025 Royal Society for the Prevention of
Accidents (RoSPA) Awards and by the Purpose Coalition
for our safety leadership in high-risk frontline roles.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 40
Ensuring operational excellence through
safe operations and resilience
Wellbeing
Highlights
ISO 45003
certified in
multiplefrontline
environments
Maintained
Tier 1 status
in CCLA Corporate
Mental Health
Benchmark for
fourth consecutive
year
Reflective rounds and
trauma-informed support
piloted in high-impact roles
Our colleagues regularly navigate tough and complex
challenges in their work. Safeguarding them and those
they serve, along with the families who depend on both,
is a responsibility we take seriously.
We define ‘wellbeing’ as having strong relationships –
inside and outside of work – providing colleagues with
good work that is interesting and for which they are
rewarded appropriately, and an environment where we
promote physical and psychological good health and
provide early intervention and proactive support.
In 2025, we have continued work to achieve ISO 45003
accreditation for robust management of psychosocial
risks in the workplace, with certification now held for
specific contracts in the UK and preparation under way
for contracts in the Middle East. This follows the
accreditation of Serco’s operations at HMP Ashfield in
2024 – the first prison to achieve this recognition. We
have since achieved certification in our UK asylum (AASC)
and immigration (Yarls Wood) settings. Our staff support
services, including the ‘Trauma Support Pathway’ and a
trauma risk management approach across our UK Justice
& Immigration business, has demonstrated impact for
colleagues in reducing absence.
We continue to prioritise the mental health of our
colleagues, retaining our Tier 1 ranking in the CCLA
Corporate Mental Health Benchmark, an independent
assessment of how listed companies approach and
manage workplace mental health. We are one of only
two participating employers in the CCLA UK100 to
retainthis ranking for a fourth consecutive year.
Wellbeing support includes regional wellbeing
programmes and employee assistance programmes,
alongside peer support networks such as our Divisional
wellbeing ally networks. Regular awareness campaigns
including the ‘make it personal’ campaign highlight the
training and support available to colleagues.
This year, to strengthen manager capability to support
colleague mental health, we have redesigned our
psychological health and safety training. We have also
introduced a bespoke License to Lead training module
on leading for wellbeing and psychological first aid.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 41
Ensuring operational excellence through safe
operationsandresilience continued
In 2025, we deepened our focus on building a culture
where colleagues feel safe, supported and able to thrive.
Our global colleague networks support colleagues to
connect, have a voice and feel part of a community.
As a people-intensive business operating in complex
environments, our ability to attract, retain and support
colleagues depends on how effectively we care for their
physical, mental and emotional health, and the sense of
belonging they feel to our teams and organisation.
Diverse workforce and inclusive workplace
Highlights
Inclusion
Forum
launched in UK &
Europe to shape
priorities and
engagement
Guaranteed
interview* pathways
for veterans, people
with disabilities and
those with prior
convictions who
meet the minimum
requirements for
thejob
First cohorts
completed Empower* (women’s progression)
development programme
We enable progression and opportunity across our
diverse workforce through fair, consistent and
transparent processes grounded in capability,
performance and potential. This approach supports our
strategic priorities, reflects our Values, and operates
within the regulatory environments in which we work.
In 2025, we launched a new inclusion forum for
colleagues, managers and leaders in UK & Europe,
meeting with ESG colleagues four times a year. This
brings strategic focus to our inclusion work, including
development of communication with all colleagues
andthe Belonging module within License to Lead.
We continued to improve access to structured
development opportunities through initiatives such as
Grow With Serco, Empower* for women, and Ignite*
forblack and black identifying colleagues.
For more information visit
serco.com/our-people.
These programmes support fairer progression and greater
visibility of talent across under-represented groups.
Alongside our global frameworks, we take a regionally
tailored approach to social mobility, recognising that
barriers to opportunity vary significantly across our
markets. This includes:
• dedicated pathways to support veterans globally;
• inclusive employment opportunities for colleagues
with disabilities;
• programmes supporting Indigenous and First Nations
communities in Canada and parts of Asia Pacific; and
• nationalisation initiatives across the Middle East.
For example, Serco’s First Nations Maritime Traineeship
Programme, established in partnership with First Nations
communities, creates culturally informed pathways into
the maritime sector. The programme continued to
strengthen in 2025. The first participants successfully
completed the traineeship and progressed to roles in
our Defence Marine Support Services team, supporting
increased participation, skills development and long-
term opportunity.
Across the Group, we maintain focus on the
representation of women in global senior leadership,
currently 34% in 2025, while ensuring senior
appointments are made on capability through fair and
equitable processes. At Board-level, we exceed the
Parker Review target, with two minority ethnic Board
members.
Serco has been a member of Inclusive Employers in the
UK since 2017, supporting the development of our
inclusive employment policies and practices.
To support our commitment to inclusive recruitment,
hiring managers complete unconscious bias and
inclusive recruitment training. We offer guaranteed
interviews* for veterans and reservists and candidates
with disabilities, who meet the minimum requirement
forthe job they apply to.
Our structured approach to training and learning
supports colleagues to build the skills and opportunities
for development and progression. We hold 5% Club
Gold, reflecting the goal to have 5% of the workforce
inearn and learn positions (apprenticeships, graduate
training, or sponsored placements) within five years of
joining the 5% Club.
* Excludes North America.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 42
Fostering a diverse workforce
andinclusive workplace
Colleague experience is a core
driver of performance. Clear
structures and processes enable
us to listen, learn and act
decisively on what matters most
to our colleagues.
Highlights
71 points
Viewpoint
engagement
surveyscore
Global
launch
of Grow with Serco
Recognition
through our annual Impact Awards,
with967colleague nominations in 2025
Our annual Viewpoint survey, conducted in November
2025, captures colleague feedback on engagement and
belonging across Serco and informs our ongoing priorities.
This year, the survey reported an engagement score of
71, reflecting a stable overall position. While there were
movements across individual drivers and population
groups, these effects broadly offset at an aggregate
level, resulting in an outcome that remains within normal
year-on-year variation.
Throughout the year, we have acted on feedback from
the 2024 Viewpoint survey through targeted regional
commitments, locally owned action plans, and continued
investment in global solutions. This included:
• Global launch of Grow with Serco in 2025. Serco’s
commitment to growth, inviting colleagues to take
charge of their development while building a stronger,
more future-ready Serco. This programme included
our Talent Hub, Serco Standards, License to Lead and
License to Learn products.
• In Asia Pacific, more than 1,100 colleagues attended
sessions during a week-long Learning & Careers
Festival on topics including creating a caring culture,
belonging behaviours and psychological safety.
• In 2025, we commenced the implementation of the
Beekeeper Colleague Connection platform. This
mobile-first tool will enable consistent communication,
feedback, recognition and resource access for all
colleagues, including those in frontline or remote
roles. The roll-out of Beekeeper in 2026 will
strengthenconnection, visibility and belonging
acrossour global workforce.
• A career week for colleagues in the Middle East
featuring six interactive sessions aligned to the Serco
Standards, complemented by Grow with Serco
roadshows held across the Kingdom of Saudi Arabia
and the United Arab Emirates. These activities were
followed by a series of ‘You Said, We Did’ panel
sessions ensuring colleagues understood the tangible
progress made as a direct result of their feedback.
• The introduction of a new targeted support approach
for local engagement, partnering central teams with
specific contract teams selected based on the scale of
workforce or need for additional support.
In 2025, the colleague engagement score for
psychological safety increased by four points, showing
that colleagues feel confident in their ability to speak up,
share their concerns and contribute openly. This is
supported by our commitment to meaningful, active
colleague listening. Employee Voice remains a specific
focus at Board level, with oversight supported through a
dedicated Colleague Connection role that ensures
colleague insight is heard directly and consistently within
Board discussions. To deepen our understanding of
colleagues’ experiences of psychological safety, this year
we partnered with Sheffield University in the UK to
explore leading approaches to psychological safety and
trauma risk. This collaboration supports a working group
now trialling interventions such as reflective rounds and
enhanced trauma support pathways in high-risk settings.
We are committed to recognising the exceptional
contributions our people make to our customers, service
users, and organisation. Our annual Impact Awards
continue to strengthen colleague experience,
celebrating the individuals and teams who embody our
Values of Trust, Care, Innovation and Pride. In2025 we
received 967 nominations across our four Divisions.
Together, these actions are shaping a culture where
colleagues feel safer, more connected and better
supported to grow.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 43
Colleague experience
In 2025, we made meaningful
progress in building a stronger,
more capable and performance-
focused organisation.
Our efforts to improve workforce stability, strengthen
leadership, modernise recruitment and deepen wellbeing
and inclusion have delivered tangible outcomes that
support safer operations, stronger engagement and more
consistent delivery for our customers.
As we look ahead, our focus is on embedding what
works and scaling it consistently across the Group.
Growth at Serco is about delivering with clarity,
resilience and care, no matter the setting. That means
continuing to build the leadership, systems and culture
required to operate safely and effectively at scale.
In 2026, key priorities include to:
• Drive incremental improvements in safety
performance and retention outcomes, building on
recent progress through consistent standards,
leadership capability and sustained focus on
colleaguewellbeing.
• Continue to evolve world-class recruitment
capabilities, supporting existing and new clients by
anticipating talent challenges, mobilising at pace and
applying data-led, AI-enabled solutions across diverse
labour markets.
• Mature our performance and development
infrastructure, with greater focus on quality of objective-
setting, behavioural reinforcement and career planning
to support long-term capability growth.
• Scale psychological safety and wellbeing, using our
new internal metrics including the new ‘psychological
consequence LTI’ metric to focus on areas of greatest
need, expand ISO 45003 certification and pilot
targeted interventions in high-impact roles and sectors.
• Strengthen development pathways, applying insights
from programmes such as Empower, Ignite and Rising
Stars to help illuminate career opportunities, support
progression and ensure development is visible and
accessible across our workforce.
• Continue to uphold inclusive access to opportunity
through responsible hiring practices. This includes
guaranteed interview* schemes for veterans,
individuals with disabilities and those with criminal
convictions (for those who meet the minimum criteria
for the role they apply for), alongside expanded
partnerships, such as our collaboration with Offploy
CIC in the UK, to support the recruitment, integration
and retention of people with lived experience of the
justice system.
• Continue to link culture to delivery, ensuring our
Values, behavioural standards and leadership
expectations are embedded in how we operate,
leadand grow, particularly in complex and people-
intensive environments.
By embedding these foundations, we are strengthening
our capacity to deliver, and reinforcing the culture,
commitment and leadership that define Serco at its best.
Our People and Culture strategy remains central to our
competitiveness and our ability to grow responsibly,
sustainably and with impact.
* Excludes North America.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 44
Looking ahead: Embedding and
scalingwhat works
Place
Helping our communities to thrive
We care passionately about the people we support through our
services and are proud of the positive difference we make in the
places where we work.
Our customers trust us to deliver essential public
services that have positive social impact and our people
strive to ensure the best outcomes. Beyond delivering
these services, by employing local people, developing
skills for work and working with local suppliers, we strive
to make a positive impact in local communities.
We actively support and promote a culture of delivering
and giving for positive outcomes. In 2025, we reviewed
and simplified our community investment approach,
seeking to increase charity and community partnerships
and enhance the positive impact of our services with
specific focus on people with criminal records, veterans
and military families, and Indigenous communities.
In light of our review, and in closer alignment with our
sector peers, we have shifted away from our previously
announced 2026 community investment ambition. Our
commitment to support the communities where we
operate remains strong. Our evolution to a people-
centred approach, focusing on volunteering our time,
skills, expertise and on creating opportunities, ensures
we continue to make a positive difference in the
communities in which we operate.
2025 Highlights
£315k
community investment
9,802
volunteering hours
£550k
donated by the Serco
PeopleFund charity
£622k
donated to charities through
the Serco Foundation charity
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 45
Delivering positive social
outcomes through our operations.
Our customers rely on us to meet the needs of the
diverse communities we operate in, enhancing lives and
strengthening society. Some of thesecommunities are
local, while others are shaped byspecific social
challenges. We provide people-focused services that
respond to unique needs, improve the experience of
service users, and maximise positive outcomes.
1. Prisoner rehabilitation
In the Justice business, we help governments and those
we care for achieve their best outcomes with our
extensive experience, use of innovative technology,
specialist partnerships and a rehabilitative approach to
offender management. In the UK:
• Our 63 in-house psychologists support over 5,000
prisoners to positively change their behaviour through
evidence-based interventions tailored to each
prisoner’s needs. We also train prison staff in
psychological techniques so that they can contribute
to efforts to reduce the risk of reoffending.
• At HMP Dovegate, reoffending rates have dropped by
50% among prisoners who complete Therapeutic
Community treatment. Serco psychologists are finding
new ways to create a culture of rehabilitation in prisons.
• At HMP Doncaster, an impactful study explored how
animal-assisted therapy improves prisoners’ physical
and mental wellbeing.
• In collaboration with Key4Life, prisoners at HMP Fosse
Way and HMP Thameside receive holistic
rehabilitationsupport.
• We partner with employability organisations to help
prisoners develop employment skills and secure work
after release. Through our partnership with Combat 2
Coffee, prisoners take part in certified barista training,
and a partnership with the National Association of Air
Duct Specialists UK is helping prisoners develop
facilities management skills.
2. Employability support
We deliver government employability programmes and
our colleagues are passionate about supporting people
to upskill and find their way to sustainable employment.
In the UK:
• The Restart Scheme, delivered on behalf of the
Department of Work and Pensions, tackles barriers to
employment and supports individuals to find secure
work in their local area.
• Serco Pathways – our dedicated programme
co-produced with people with lived experience of the
criminal justice system – supports individuals facing
barriers, including those with criminal records, military
veterans and families, to source and sustain meaningful
employment opportunities. Serco Pathways supports
people with criminal records in partnership with
Offploy CIC. Following the success of the 2025 pilot
that enabled 25 people into employment at Serco, in
2026 our ambition is to support 120 people facing
barriers into employment at Serco.
In Ontario, Canada, we deliver EmployNext, an
employment services programme supporting job
seekers. In 2025, of the people our colleagues at
EmployNext supported, 37% were persons with
disabilities and 7% were Indigenous persons.
EmployNext works with jobseekers to develop skills,
connect withlocal employers and address
disadvantaged community access barriers, connecting
thosewith complex needs to support. For employer
partners, EmployNext provides tools for inclusive hire,
including the Disability Confident Toolkit and Fair
Chance Toolkit.
3. Veteran and Indigenous communities
We are proud to support veteran communities through
employment, partnership and sponsorship, recognising
the value of their service and the challenges that they
can face. Our SercoVets network provides colleagues
with transition support, professional development,
mentoring and networking opportunities in North
America and Asia Pacific.
In the US, we secured the gold award asa military
friendly employer and spouse employer. Wepartner
with the Department of War’s SkillBridge programme to
provide opportunities for transitioning US service
members to gain civilian work experience through
industry training, apprenticeships or internships during
the last 180 days of service.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 46
Service impact
In 2025, we were ranked third in the Great British
Employers of Veterans programme, and first in our
sector. This is a leading benchmark of employers
delivering outstanding pathways and support for
veterans, reservist and military families.
In Australia, Serco is proud to be recognised as a
Veteran Employer of Choice and a gold member of the
Defence Reserves Supportive Employer programme.
In New Zealand, Serco sponsors the Soldiers, Sailors and
Airmen Association of New Zealand (SSAANZ) which
provides advocacy, support and community connection
for current and former members of the New Zealand
Defence Force.
We are committed to supporting Indigenous
reconciliation movements in Australia and Canada,
helping governments to address inequality and build
stronger relationships with all community members.
In 2025, we submitted an updated Reconciliation Action
Plan to Reconciliation Australia. Its ‘Stretch’ status
indicates “a very strong approach towards advancing
reconciliation internally and within the organisation’s
sphere of influence”. Of the 91 projects outlined in the
plan, 78% have been completed, reflecting Serco’s
sustained commitment to reconciliation, meaningful
engagement with First Nations communities, and
embedding cultural respect across its operations.
Serco’s commitment to First Nations engagement includes:
• the Tactical Elders Programme in Acacia Prison which
empowers Elders through culturally appropriate
rehabilitation pathways; and
• the Colour Chromotherapy Project at Adelaide
Remand Centre which explores therapeutic use of
colour in correctional environments to promote
wellbeing and cultural connection.
Serco has been invited to present on both these
innovative programmes at prisons and health
conferences in Australia.
Measuring the social value in our UK operations
In line with the UK Government’s social value model, we
use the Social Value Portal and the National Themes and
Outcomes Measures (TOMs) system to monitor, measure
and report our impact in the UK. The portal uses a
collection of 116 measures, configurable to support
ourgovernment customers in achieving their impact
objectives. In 2025, we have recorded £44m added
value (proxy value).
Following the UK Procurement Act 2023 coming into
force in February 2025 and the emphasis on social value
in public sector procurement, we reviewed the TOMs
wereport against and updated proxy values for key
metrics including employment of people from under-
represented groups and community investment through
volunteering and in-kind support.
In 2025, we increased the number of UK contracts
recording social value using the Social Value Portal to
30% of UK operational contracts. For 2026, our ambition
is to extend the use of the Social Value Portal to record
corporate impact delivery and to recognise the social
value we are achieving through our supply chain.
To ensure our activities deliver social outcomes specific
to the communities in which we work, we have adopted
the Local Needs Analysis Tool this year. This enables
teams to design social value plans and analyse
opportunities for impact within contracts in local areas.
In October 2025, Serco was recognised at the Social
Value Awards as ‘highly commended’ for ‘Private Sector
Leadership’ and ‘Accountability and Reporting’.
£44m
proxy social value delivered
inthe UK, calculated using
TheSocial Value TOM system
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 47
Delivering for our communities.
Serco operates over 650 contracts in communities across
the geographies in which we operate, employing
colleagues from the local community. As a local
employer we recognise that our colleagues represent,
and are passionate about contributing to, their local
communities. Across our diverse teams and operations,
we take an active role in initiatives and partnerships that
make a positive impact, while supporting and sponsoring
causes that reflect ourValues.
Contributing to our communities through volunteering
We support our colleagues to volunteer their time and
skills in their communities. This year, 9,802 hours have
been given in volunteering time with an estimated value
of over £200,000.
In 2025, we invited UK colleagues to tell us about their
volunteering efforts, so that we could recognise and
reward their contributions to community investment
through donations to the charities they volunteered with.
Aligning with International Volunteering Day, we
selected 10 entries to receive a £500 donation each,
supporting a variety of good causes.
These included nationally recognisable charities such as
the RAF Benevolent Fund as well as key impact partner
organisations such as Key4Life.
Other examples of our actions in 2025 include:
• In the UK, we supported child literacy through our
partnership with Chapter One and the Children’s Book
Project, tackling book poverty and giving every child
the opportunity to own their own book. Through
collection campaigns at leisure sites and corporate
centres, and funding the insurance costs of the
charity’s fleet of vans for 2025, we have supported the
distribution of books to schools.
• Colleagues at our UK prisons and immigration centres
collected crisp packets and transformed them into
blankets for homeless people. AtHMP Ashfield,
colleagues distributed the blankets with Bristol
Outreach Services for the Homeless.
• In North America, the SercoVets colleague network
collected toys for the Marine Corps Toys for
TotsFoundation.
In 2026, we will continue to collaborate with community
and charitable organisations where we can contribute a
positive impact in our communities.
The Serco People Fund is an independent charity
providing grants to current and retired Serco colleagues
and their families when they face extraordinary financial
challenges. In 2025, the People Fund has made a
remarkable impact, including:
• over £550k of grant funding;
• over 340 colleagues and their families supported
through tough times; and
• over 30 colleagues supported with their mental health.
Example grants provided in 2025
A colleague in the Middle East gained support to help
cover medical costs for their newborn baby who
required immediate surgery.
A colleague in the UK was granted a deposit and first
month’s rent on a new house to help them and their two
children escape an abusive situation.
The Serco Foundation is a charitable trust working
tosupport vulnerable citizens and enhance public
service outcomes by sponsoring associated causes
internationally. Applications are sponsored by a Serco
colleague and include opportunities for colleagues to
become involved through practical volunteering, sharing
skills and expertise, use of Serco assets and more.
Example support provided in 2025
Support has helped ongoing partnerships with
organisations aligned to priority impact areas including
SSAFA (theUK armed forces charity), supporting
veterans in thecriminal justice system, Standing Tall,
tackling homelessness, and Envision, promoting social
mobility for under-represented young people. Support
for other key priorities included:
• Local community – £214k
• Schools, education and young people – £183k
• Domestic abuse support – £74k
• Employment support – £59k
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 48
Community impact
Planet
Transitioning our business to Net Zero
The climate, nature and wider environmental challenges present
both risks and opportunities for our business.
We are committed to proactively addressing these
byreducing greenhouse gas (GHG) emissions across our
direct operations and wider value chain. We also
address our wider climate risks and opportunities (see
our Task Force on Climate-related Financial Disclosures
(TCFD) statement on page 60) and embed resource
efficiency, while maintaining broader environmental
protection across our operations. Ourapproach aligns
with our Values and Purpose, supporting our compliance
obligations, Growth ambitions, Competitiveness, and
commitment to Operational Excellence.
We collaborate with suppliers, customers, and
stakeholders to advance shared Net Zero goals.
Wecontinue to deliver GHG reductions and deliver
arange of services to governments worldwide which
support customer environmental sustainability goals.
2025 Highlights
A List
CDP climate change
questionnaire 2025 and for
supplier engagement in 2024
Supplier
Net Zero
Standard
launched in 2025 to further
support our suppliers’
decarbonisation journeys
Net Zero
Action
Plan
implemented in our
UK&Europe Division
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 49
Our Net Zero targets were
validated by the Science Based
Targets initiative (SBTi) in 2024
and we continue to strive toward
achieving them.
During 2025, our strategic Climate Transition Plan (CTP)
was reviewed internally and decarbonisation modelling
work was undertaken through external support.
Associated operational Net Zero action planning was also
progressed, laying out a structured, multi-year approach
with the aim of achieving Net Zero by 2050.
We are reliant on external factors that we do not directly
control to meet our targets, including dependencies
ongovernment policy and regulation, technology
developments, supply chain availability, customer
policyand investment. Proactive collaboration with
stakeholders remains a key element of our approach
tosupport the transition to Net Zero.
Supporting our customers to reach NetZero
We operate primarily on our customers’ sites and assets,
supporting their Net Zero targets through a diverse
range of services that support the transition to a low-
carbon economy. These services include facilities,
energy and waste management; specialist design,
engineering, maintenance, and modernisation of assets;
and intelligent transport systems and analytics to help
design and operate efficient transport services. Across
all of our operations we are committed to delivering
operational excellence, supporting our customers’
decarbonisation and wider environmental protection
efforts. For example, in 2025:
• Our UK Leisure business has supported the installation
of photovoltaic arrays at leisure centres.
• We developed a single shipping action plan in the
UKfor our Defence and NorthLink ferries contracts,
including decarbonisation options for new vessel
design and low-carbon fuels where practicable. We
arereliant on customer support, funding and demand
to progress these actions.
• In Australia, we supported Fiona Stanley Hospital to
become the first hospital in the state to achieve a
national rating for sustainability performance,
recognising efficient energy, water and waste
management.
We also deliver operational transformation and advisory
services. Launched in 2024, +impact supports
government, critical national infrastructure and regulated
business. In 2025, we secured access to a number of
keyframeworks (under Serco Limited) across our global
operating markets. Our sustainability team supports
customers to develop strategic plans, create
sustainability targets, and implementation roadmaps
toachieve their ambitions.
In 2025, Climatize, part of +impact, reaffirmed its role
asa sustainability leader in the Middle East region
achieving recognition through external awards,
including ‘Sustainable Consultant of the Year’ at the
regional Green Building Awards.
A Climatize-supported project also achieved the region’s
highest level of green building certification. The DAMAC
Hills 1 community project achieved Leadership in Energy
and Environmental Design (LEED) Gold certification –
thefirst operational development in the region to reach
this milestone.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 50
Our own operations Our supply chain
46%
95%
absolute reduction of
operational emissions by
2030 (Scope 1 and 2) vs
2022base year
of suppliers (by emissions)
tohave Science-Based
Targets (SBTs) by 2028
(Scope 3)
25%
absolute reduction in
business travel and fuel- and
energy-related emissions by
2030 vs 2022 base year
Carbon and climate
For the full text of our approved targets, visit
serco.com/our-impact/performance.
Further detail is available on the dedicated +impact
website. For wider information on our ESG-related
external awards, case studies and support to
customers visit serco.com/our-impact.
In our direct operations, we prioritise the avoidance and reduction of GHGs through resource efficient operations,
theuse of renewable energy, and we strive to decarbonise our fleet, buildings and client assets. Our UK & Europe
Division, accounting for the largest share of Serco’s operational emissions, implemented a comprehensive Net Zero
Action Plan (NZAP) in 2025 to accelerate progress toward Net Zero by 2050 or sooner. Actions were delivered across
fleet, buildings, shipping, people and culture, and supply chain. The Division also introduced the “Together to Zero”
framework to strengthen collaboration with customers, partners and suppliers. The NZAP was shortlisted for a ‘Net-
Zero strategy of the year’ industry award in 2025, and work is planned for 2026 to assess how elements of this
approach can be replicated across other Divisions to support the Group’s wider decarbonisation programme.
Target:
46%
absolute reduction
of operational
emissions by 2030
(Scope 1 and 2) vs
2022 base year.
Progress:
32%
reduction in 2025
vs 2022.
3% improvement
vsrestated 2024
emissions (29%
reduction vs2022).
Lower emissions fleet and fuels
In 2025, fleet emissions accounted for 90% of our overall Scope 1 and 2 emissions.
Our road fleet composition 2022 vs 2025:
Petrol: 20% to 17% Diesel: 55% to 44% Hybrid: 18% to 26% Electric: 7% to 13%
2025 performance 2026 priorities
• In UK & Europe, we began implementation of a
Fleet Decarbonisation Strategy, supported by
telematics data.
• In North America, we have continued to expand
the use of telematics across our fleet, gaining
more accuracy on fuel use, particularly in our
safety service patrol contracts.
• In Asia Pacific, we completed our planned
upgrade of a proportion of our vehicles within our
largest contract fleet to more efficient vehicles.
• In UK & Europe we will continue to transition to
electric vehicles as much as practicable towards
our 2030 target, noting challenges on the
availability and cost for heavy goods vehicles.
• In North America we will review fleet management
systems, data and processes, updating estimated
data with telematics data.
• In Asia Pacific we will trial operational changes to
reduce vehicle movements and carbon in our
largest contract fleet.
Renewable-sourced electricity (RSE)
• We have continued to be 100% reliant on RSE globally in 2025.
Decarbonising the built environment
• New Energy Management System procured to
support efficiency savings across our UK sites.
• In UK & Europe, we reviewed our green leasing
approach and standard operating procedure
(SOP) to support acquiring low-impact buildings
and Net Zero-aligned initial fit-outs.
• In the UK, we will embed a new Energy
Management System across key Serco and
customer sites and introduce our new green
leasingapproach and SOP.
• We will continue to be 100% reliant on RSE
globally in 2026.
Target:
25%
absolute reduction
in business travel
emissions by 2030
vs 2022 base year.
Progress:
21%
reduction in 2025
vs 2022.
Reducing business travel
• We launched our first Group-wide travel and
expenses policy, supporting carbon and cost
reductions.
• Our travel booking interface was updated to
provide more transparency on the carbon impact
of colleague travel choices.
• Significant changes to carbon emission factors
in2025 helped to deliver reductions.
• We restated North America business travel
emissions using an updated, more transparent
methodology, reviewed by Accenture.
• In appropriate regions we will review our car hire
policy to select electric vehicles when practicable.
• Globally we will continue to review further
opportunities to influence colleague travel
choicesthrough awareness and our travel
booking interface.
• We will continue to monitor compliance with
ourtravel and expenses policy, noting first and
business class flights contribute a significant
proportion of our overall business travel
emissions. Our new policy clarifies economy is
theexpected air travel class unless certain criteria
are met.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 51
Our operational emissions
Our supply chain accounts for
the largest proportion of our
overall GHG emissionsat 59%.
We continue to collaborate with our supply chain to
address these emissions, supporting Serco and customer
climate targets. In 2025, we launched our Net Zero
Standard to engage and encourage our supply chain
partners’ transition to Net Zero. We initially targeted our
top 250 suppliers prioritised by emissions, however we
encourage all suppliers to embrace the principles and
practices outlined in our Net Zero Standard.
As of 31 December 2025, 10% of our suppliers (by
emissions) have committed to or have had science-
aligned targets validated by the SBTi, a decrease against
15% in 2024. Achieving our target of 95% remains
challenging, noting that only around 12,000 companies
worldwide were SBTi-committed or validated in 2025
(circa 4,000 of our circa 19,000 suppliers accounted for
95% of our emissions in 2025). SBTi have noted
challenges faced by organisations in meeting supplier
engagement targets and the revision to their target
setting framework in 2026 is anticipated to include
afocus on relevance and influence rather than
percentagethresholds.
Customer policy on Net Zero across our operating
Divisions remains a factor in our success in meeting our
target given the emissions profile of our supply chain.
A large proportion of our supply chain emissions are
generated in our North American operations and we
acknowledge the policy environment represents a
barrier to our US-based supply chain partners
committing to Net Zero and setting targets. In 2025, we:
• were recognised on CDP’s A List for supplier
engagement on climate change; and
• established a new partnership with Green Project
Technologies, a leading supply chain technology
platform supporting the measurement of Scope 3
supply chain emissions and scalable supplier
engagement.
In 2026, we will:
• continue supplier engagement campaigns, providing
the tools and signposting information, such as a
supplier carbon calculator, to support our suppliers’
decarbonisation efforts in appropriate regions;
• explore the introduction of climate-related clauses
within key supplier contracts in appropriate regions;
• engage SBTi on forthcoming changes to their target
setting framework and when we could transition; and
• monitor changes to the Greenhouse Gas Protocol
corporate accounting and reporting standard.
The latter two industry-wide changes may affect our
future carbon accounting approach and potentially
trigger a review of all our Net Zero targets in the
nearterm.
Our Net Zero Standard
The Ask
Net Zero by
2050 or sooner
Calculated and
published emissions
Science–aligned
targets
Public Net Zero Commitment by 2050
A clear, public commitment from
oursuppliers to achieve Net Zero
emissions across their value chain
by2050 or earlier.
Comprehensive Carbon Accounting
Clear measurement and transparent
disclosure of our suppliers’ carbon
footprint. Potential methods include:
• CDP’s climate questionnaire
• External reports
• Company website
Validated Reduction Pathways
Suppliers to set science-aligned
targets across their Scope 1–3
emissions which are in line with
limiting global warming to 1.5°C.
Compliance with Serco’s Supplier Code of Conduct
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 52
Decarbonising our supply chain
We recognise that our
environmental sustainability
strategy must take biodiversity
and the natural environment
into consideration alongside
emissions reduction.
We have management systems and procedures in place
to support protection of the environment, prevent
pollution, increase resource efficiency, reduce waste
tolandfill and contribute to the circular economy.
Assessing our nature risks, opportunities, impacts
(ROIs) anddependencies
We continue to progress our understanding of our ROIs
and dependencies on nature and biodiversity. In 2025,
we have expanded our preliminary analysis while
continuing to monitor emerging good practice, helping
to meet our environmental protection commitment,
regional specific customer expectations, and future
reporting requirements.
We remain members of the Taskforce on Nature-related
Financial Disclosures (TNFD) Forum, an initiative
supporting organisations to develop a robust approach
to mitigating and managing nature impacts and
dependencies, risks and opportunities on the journey
toNet Zero.
Supporting our customers at local and global level
We continue to progress local initiatives to deliver
impact at contract level. For example, where we hold
grounds maintenance responsibilities we strive to
integrate nature positive initiatives. Our contract at the
UK Defence Academy has wildflower planting, bee hives,
a market garden servicing on-site catering, and food
waste composting to support resource efficiency efforts.
Food waste reduction remains an ongoing focus for our
contracts which include catering services.
Some of the services we deliver for government
customers help to facilitate critical scientific monitoring
and protection. For example, our European Space
business continues to support the European Space
Agency on contracts which underpin Earth Observation
and contribute to global science on climate and nature.
In Asia Pacific our support to the Australian Antarctic
Program through the operation of the research and
supply vessel, RSV Nuyina, facilitates climate and
biodiversity studies. In 2025, the RSV Nuyina successfully
completed a dedicated marine science voyage to the
Denman Glacier, one of the world’s largest, least-studied
glaciers, with the potential to raise sea levels by 1.5m if it
melts entirely.
Working with partners on nature
We continue to support and volunteer with
environmental organisations. In 2025, we started
working with Forests with Impact at our HMP Fosse Way
contract in the UK to establish a tree nursery. Forests
with Impact is a UK social enterprise that creates
commercial tree nurseries inside prisons to support
prisoner rehabilitation, nature restoration, and help
address climate change.
Deepening society’s understanding
ofclimatechange and nature’s role
Serco plays an integral role in the European Space
Agency’s Biomass mission. This state-of-the-art
satellite initiative is dedicated to deepening
society’s understanding of climate change and
nature’s role in regulating the Earth’s climate. Serco
is now responsible for the daily operation of the
satellite’s ground data systems, managing and
processing all information collected from space.
The focus of the Biomass satellite is on monitoring
forests worldwide. Using advanced radar
technology, the satellite measures the amount of
biomass — such as trees and other vegetation —
present on the planet. The resulting data is
supporting scientists to understand how forests
store carbon and how fluctuations in forest health
can impact the global climate.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 53
Environmental protection
and supporting nature
Responsible sourcing for people, place and planet
Our Sustainable Procurement
Charter sets our ambition to
work collaboratively with our
supply chain.
Our Supplier Code of Conduct outlines our global
expectations of suppliers. In 2025, we have been
reviewing our charter to consider our revised ESG
Framework, Net Zero Standard (see Planet section page
49), latest industry good practice, and regional ESG
priorities. We expect to publish our refreshed
Sustainable Procurement Charter and revised Supplier
Code of Conduct together in 2026, linking the two
together as appropriate.
Supplier diversity
We are working to maximise service and community
impact by diversifying our supply chain to include small
and medium-sized enterprises (SMEs) and voluntary,
community and social enterprises (VCSEs), noting
regional variations in definitions. Region-specific
supplier diversity programmes are operated, aligned
tolocal ESGpriorities. In the UK:
• 58% of suppliers are SMEs or VCSEs, representing
30% of overall spend*. In 2025, we have set an
ambition to increase our spend with SMEs and VCSEs
in our supply chain;
• we have pledged over £4m of our Apprenticeship
Levy fund to local SME employers andpublic service
providers to support vital training and skills since 2021;
• we achieved bronze status on the UK Government’s
Fair Payment Code and improved ourstandard
payment terms for SMEs from 30 days to21 days; and
• at our annual Supplier Partner Day we recognised the
contribution of SME suppliers as well as introducing
our inaugural Supplier Sustainability Awards and
launching our Net Zero standard to key suppliers.
In the US, our rating improved to ‘very good’ for small
business subcontracting and outreach activities under
our US Government prime contracts.
In Australia, we work with Indigenous enterprises.
In2025, we entered into two new partnerships, Killara
Services, one of Australia’s largest Aboriginal-owned
andoperated cleaning companies and Kari Foundation,
providing community support and housing programmes.
Embedding sustainable procurement activity
In 2025, we introduced sustainable procurement training
for our Procurement teams. This supports existing
sourcing and supplier management processes to embed
sustainability considerations and required EcoVadis
assessments. 49% of our procurement colleagues
globally (97% excluding North America) have received
training on sustainable procurement in the last two years.
We continue to partner with EcoVadis to undertake
supplier sustainability assessments:
• 735 supplier entities representing 59% of our
addressable spend have completed an assessment by
31 December 2025 with an average score of 64 points;
• 363 suppliers completed reassessment in 2025, of
which 272 improved on their previous score with an
average increase of 4.5 points; and
• 12% of the assessed suppliers have engaged in
corrective actions in 2025.
Sustainable procurement is embedded in our sourcing
and contracting processes, and we have developed tools
and training to strengthen accountability and supplier
engagement. In 2026, we will continue to focus on
improving sustainability performance and risk
management within our supply chain. In the UK, we are
actively mandating our suppliers to undertake EcoVadis
sustainability assessments for key supplier renewals.
This year, we saw an overall improvement of 5 points in
our own EcoVadis assessment score to 65, with a 9-point
improvement in the sustainable procurement pillar of
theassessment. This is consistent with our bronze
medalstatus.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 54
Sustainable procurement
* Excludes internal payments, regulatory payments,
and payments to customer contracts.
Our responsible business foundations
We remain committed to operating responsibly and
maintainingthe highest standards of governance across
everyaspect of our business.
Fulfilling our Purpose, and our Vision of being the
partner of choice to governments globally, relies on
strong governance that drives ethical and effective
decision-making.
We work in sensitive areas of government policy and
service delivery, balancing diverse interests across
complex stakeholder ecosystems. We follow the
governance procedures in our Business Lifecycle Review
Process when considering opportunities and as part of
contract life cycle management. This includes
consideration of legal, ethical, human rights, health,
safety and environmental risks and opportunities.
Our Values and commitment to responsible conduct are
supported by our policies, procedures, Code of Conduct
(mycode) and mandatory training. Our established Ethics
& Integrity (E&I), Human Rights, Data Protection and
Information Security programmes address material
topics identified in our DMA. Collectively, these
initiatives form the foundation of our commitment
toresponsible business practices.
2025 Highlights
76 points
ethical standards Viewpoint
engagement survey score
EthicsMatters
launched, reaffirming our
commitment to ethical
behaviour and integrity in
everything we do
1.15
Speak Up case rate, down
from1.30 in 2024
Fraud Prevention
new policy launched
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 55
Governance
Our Values and high ethical standards inform our actions
and decisions. We aim to act with integrity in all that we
do. We believe this is the right thing to do, for our
people, our business and our stakeholders. Failure to
Act with Integrity is identified as a principal risk (see
page 73), underlining the importance of E&I, including
human rights, at Serco.
Our E&I programme
Our E&I programme is a fundamental part of our
organisation – educating, engaging and empowering
colleagues globally to do the right thing. The
programme is structured to incorporate leadership and
oversight, risk assessment, learning and engagement,
monitoring and assurance. mycode is central to the
programme and supported by other standards,
procedures and due diligence processes. Details of our
confidential reporting service, Speak Up, are publicly
available through our website and highlighted to
colleagues in various ways. The scope of our E&I
programme includes anti-bribery and corruption, fraud,
other financial crimes, competition law, trade sanctions
and export control, human rights and prevention of
modern slavery, and whistleblowing. Our global network
of E&I champions helps embed the programme locally
and inform its further development. We use data to
monitor the effectiveness of the programme. In 2025,
wemaintained our Viewpoint survey score of 76 points
for “I never feel under pressure to compromise our
ethical standards” (Ethical standard score).
Alongside our regular programme of activity, we drive
specific projects to strengthen our approach. Our 2025
E&I strategy grouped these projects under three pillars:
Efficiency, Engagement and Effectiveness. In 2025,
under the Engagement pillar, Serco launched the
EthicsMatters brand to bring a cohesive identity to the
E&I programme. The launch campaign reinforced our
Values-based approach, highlighting what acting
ethically means in our work, and emphasising the
importance of speaking up. It included a message from
our Group Chief Executive, a toolkit for managers to
encourage team conversations, and sharing ethics
stories. This was supported with other engaging
communications materials including an animated video.
A refreshed ethics channel on our colleague
communication platform increased its number of active
members threefold. In October 2025, we supported
Global Ethics Day as an opportunity to raise awareness
of EthicsMatters, the ethics resources available and the
importance of completing our mandatory Serco
Essentials training.
A key Effectiveness pillar project in 2025 was our fraud
prevention improvement programme. This was a cross-
functional, cross-Divisional project to enhance fraud
prevention at Serco, given the UK’s new ‘failure to
prevent fraud’ offence which came into force under the
Economic Crime and Corporate Transparency Act 2023
(ECCTA). This included detailed risk assessments and
the development and launch of a new Fraud Prevention
Policy. In International Fraud Awareness Week we
launched a Fraud Awareness toolkit to help colleagues
spot and stop fraud.
mycode – our Code of Conduct
Based on our Values, mycode defines what we expect of
our businesses and colleagues regardless of location or
background. mycode outlines the rules and procedures
that all colleagues should follow. Itcovers looking after
each other, doing business the right way, keeping assets
and information safe, making difficult decisions and
speaking up. Subject matter experts from across the
organisation regularly review mycode. This year, we
added a new section to equip colleagues with information
on fraud prevention to reflect the ECCTA guidance.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 56
Ethics and Integrity
For more information visit
serco.com/mycode
Serco Essentials
Serco Essentials is our mandatory training programme
for all employees. Core modules are refreshed
periodically and include safety, prevention of financial
crime, data protection, information security and Living
our Code. All colleagues are required to complete
certain training when they join Serco and there is an
ongoing programme, differentiated for managers and
non-managers.
Speak Up
We foster a culture of speaking up, reporting concerns
and aiding investigation without fear of retaliation. We
maintain multiple channels for speaking up, including
our confidential reporting service, Speak Up, hosted by
an independent third party. Reports can be raised
anonymously.
We encourage colleagues, partners and the public to
report any suspected breach of mycode, our Values or
relevant laws. Issues raised are dealt with promptly and
appropriate action taken, including thorough internal
investigation where appropriate. We continue to
strengthen our use of data analytics to understand
trends and drive future improvements.
Third-party due diligence
We carry out proportionate risk-based due diligence on
suppliers, agents, strategic partners and customers. Our
independent third-party screening tool gives key insights
into areas such as regulatory breaches and adverse
media, including in relation to human rights and modern
slavery. This tool provides ongoing risk-based due
diligence monitoring. We also expect our suppliers,
subcontractors, agents and strategic partners to adhere
to the standards we set out in our Supplier Code of
Conduct; see Sustainable Procurement on page 54.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 57
Human rights are fundamental rights and freedoms, and
standards of treatment to which people are entitled.
Serco is committed to respecting the human rights of
individuals in all aspects of our business, wherever we
operate. We strive to respect and protect the dignity and
human rights of our colleagues and service users,
addressing complex social challenges in the most
appropriate, humane manner.
Recognising all applicable modern slavery legislation,
we will not engage in any form of human trafficking or
use forced, bonded, illegal or child labour, nor
knowingly work with anyone who does.
Our commitment to human rights is set out in our Group
Human Rights Policy Statement, related operating
procedures, and relevant sections of mycode. We use
international human rights principles such as the
International Bill of Human Rights, the International
Labour Organization’s Declaration on Fundamental
Principles and Rights at Work, the United Nations Global
Compact and the United Nations Guiding Principles on
Business and Human Rights to guide decision-making,
constructive engagement and the assessment,
mitigation, monitoring, management and remediation
ofany actual or potential adverse human rights impacts.
We provide guidance and support to our employees to
help them identify, manage and respond to human rights
risks or issues. Our Enterprise Risk Management system
is used to manage human rights and modern slavery risk
in our business. In 2025, we refreshed our approach to
assessing human rights risks for the organisation.
Through our Business Lifecycle Review Process, we also
take reasonable and appropriate steps to identify,
prevent or mitigate risks of adverse human rights
impacts in our operations. Concerns about human rights
violations can be raised through our Speak Up service.
We are mindful of the particular human rights risks in our
Justice & Immigration businesses, while other business
areas have a lower risk profile for human rights concerns.
For more information about how we manage these
risks, see our Human Rights Supplement available
on serco.com.
We recognise modern slavery risk in our extended supply
chain and take a risk-based approach to managing it,
focusing on those purchase categories that have been
assessed as high risk. This includes use of risk profiles for
current and prospective suppliers based on assessment
against key modern slavery risk indicators and informed
by our third-party risk management solution.
In 2025, we continued our partnership with Slave-Free
Alliance, working with them on training, potential
improvements to due diligence and our modern slavery
reporting, as well as trialling an in-depth supplier
assessment for key suppliers within high-risk product
categories. We also remained active members of the UK
Business Services Association Modern Slavery Council.
We share their Modern Slavery toolkit, which we helped
to develop, with suppliers we believe would benefit.
For more information see our Group Human Rights
Policy Statement, Human Rights Supplement and
Modern Slavery and Human Trafficking Statement
available on serco.com.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 58
Ethics and Integrity continued
Serco is committed to delivering secure services and
safeguarding the data we collect, store, and process.
We regularly assess and strengthen mitigating controls
to minimise the risk of data breaches or service
disruption. Our approach aligns with recognised
industry practices and international standards, reflecting
the increasing geopolitical risk environment and the
growing sophistication of cyber threats.
Throughout 2025, we continued investing in systems,
processes, and our people, supported through security
awareness training, global phishing simulations and
crisis management exercises. We operate a continuous
programme of information security investment designed
to respond to the evolving threat landscape and ensure
compliance with customer expectations, regulatory
obligations, legal requirements and contractual
commitments. This work is informed by internal
compliance assurance reviews and external assurance
activities to help strengthen resilience, including annual
ISO 27001 surveillance, Cyber Essentials Plus (UK
Government recommended) and customer-led audits.
We continue to strengthen our approach to data
protection given the evolving external environment,
including cyber threats.
Oversight is provided by the Group Data Protection
Officer, supported by regional privacy leads and a
network of Data Protection Champions (DPCs) who
continue to embed consistent practices across
operational teams. This network provides a foundation
for improving visibility and capability in key areas.
During 2025, we initiated a refresh of the UK data
protection compliance framework, with implementation
and operational embedding ongoing. We will assess
where and how best practice elements of the framework
may be extended across the wider Group in 2026,
recognising that Divisions vary in the maturity of their
existing programmes.
We are also updating Group-wide data protection
policies and privacy notices to reflect changes in
operational practice, contractual expectations and
emerging regulatory requirements, including new
legislation. Training and awareness form an important
part of our overall approach, alongside policies,
processes and controls. Mandatory annual data
protection training is supported by ongoing role-specific
training for DPCs and HR teams. Our global “Protect
Together” awareness programme, including annual
phishing simulations and targeted behavioural
campaigns, continues to enhance colleague awareness,
although we recognise that further improvement is
needed to embed consistent, secure practices.
Oversight of our ESG agenda continues to be a key part
of our broader organisational governance process.
Board oversight of ESG is managed through the
Corporate Responsibility Committee.
Our Group General Counsel and Company Secretary, a
member of the ExCo, provides Executive oversight of
our ESG agenda and attends our ESG Oversight Group
where our Divisional ESG leads and functional leads (e.g.
People, Health and Safety, Ethics and Integrity) work
collaboratively to understand and assess our material
ESG risks, ensuring we continue to manage and
minimise potential negative impacts while seeking to
capitalise on opportunities to support the growth and
continuous improvement of the business.
Material ESG topics are proactively managed through
our enterprise risk management process.
Read more in our Corporate Responsibility
Committee Report on page 104.
Read more in our Risk Management section
onpage 66 and our Principal Risks and
Uncertainties on page 69.
For more information and signposting on how
wemeet our non-financial and sustainability
disclosure requirements and consider ESG
matters for our business and stakeholders,
pleasesee our Non-Financial and Sustainability
Information Statement on page 78 and Section
172 (1) Statement on page 90.
Impact report continued
Serco Group plc | Annual Report and Accounts 2025 | 59
Data privacy and information security
ESG governance and risk
Our 2025 Task Force on Climate-Related Financial Disclosures
(TCFD) statement is fully consistent with the eleven recommended
disclosures against the four pillars of the TCFD framework.
We have considered the 'Guidance for all sectors’ as set out in section C of ‘Annex: Implementing the Recommendations
of the Task Force on Climate-related Financial Disclosures’, October 2021. The table below outlines the location of
disclosures within our 2025 Annual Report. We have also opted to publish a standalone TCFD compliance statement
this year, partly due to the size of the document and the level of additional detail it contains.
For our standalone TCFD compliance statement visit www.serco.com/our-impact/performance
TCFD summary
Pillar Recommended disclosures Annual Report
Standalone
compliance statement
Governance
(a) Describe the Board’s oversight of climate-
related risks and opportunities.
Page 61; Corporate Governance
section pages 87 to 93; and
Corporate Responsibility
Committee Report page 104
Pages 3 to 8
(b) Describe Management’s role in assessing
and managing climate-related risks and
opportunities.
Page 61; Corporate Governance
section pages 87 to 93; and
Corporate Responsibility
Committee Report page 104
Pages 3 to 8
Strategy
(a) Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium and long term.
Pages 61 to 65 Pages 9 to 17
(b) Describe the impact of climate-related risks
and opportunities on the organisation’s
businesses, strategy and financial planning.
Pages 61 to 65; and Critical
accounting judgements climate
risk page 172
Pages 10 to 17
(c) Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Pages 61 to 65; and Critical
accounting judgements climate
risk page 172
Page 10
Risk management
(a) Describe the organisation’s processes for
identifying and assessing climate-related risks.
Pages 61 to 62; and Risk
Management section pages 66
to 68
Pages 8 to 11
(b) Describe the organisation’s processes for
managing climate-related risks.
Pages 61 to 65; and Risk
Management section pages 66
to 68
Pages 4 to 17
(c) Describe how processes for identifying,
assessing and managing climate-related risks
are integrated into the organisation’s overall
risk management.
Pages 61 to 65; and Risk
Management section pages 66
to 68
Pages 8 to 11
Metrics and targets
(a) Disclose the metrics used by the
organisation to assess climate-related risks and
opportunities in line with its strategy and risk
management process.
Impact report - Planet section
pages 49 to 54; and Our Impact -
Data Tables: Planet section pages
241 to 243
Pages 18 to 19
(b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas (GHG)
emissions, and the related risks.
Impact report - Planet section
pages 49 to 54; and Our Impact -
Data Tables: Planet section pages
241 to 243
Pages 18 to 21
(c) Describe the targets used by the organisation
to manage climate-related risks and
opportunities and performance against targets.
Impact report - Planet section
pages 49 to 52
Pages 18 to 21
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Governance
Responsibility for climate risk and opportunity is embedded within our Corporate Governance Framework, primarily
through the Corporate Responsibility Committee which provides oversight of TCFD activities, including our strategic
Climate Transition Plan (CTP) approach and our associated operational NZAP which provides more granular detail
onhow we will progress towards meeting our science-based targets. We have assigned specific roles and
responsibilities for assessing and managing climate-related risks and opportunities by our relevant Committees,
Group and wider management functions.
Committee/Group
Identifying
climate risks/
opportunities
Considering
climate risks/
opportunities Frequency Managing/supporting functions and teams
ExCo/Corporate Responsibility/
Risk/Audit Committee
X Annual
Health, Safety & Wellbeing/ESG/Risk/Insurance/
Procurement/Property/Fleet/Growth/EMT teams
TCFD working/steering groups X X Bi-annual
The table above provides more detail on the
responsibilities by committee and group, including
frequency of meetings. Furthermore, the functions and
teams responsible for managing and supporting risks
and opportunities are listed.
Risk
We recognise that climate change continues to pose
significant risks to society and the planet. The ways
inwhich climate change impacts our own and our
customers’ assets, supply chains, and operations
arediverse.
Our business model dictates that the majority of our
work takes place on customer sites and assets, and
therefore, we do not always have financial control
fromacarbon accounting perspective or contractual
responsibility to upgrade assets to support decarbonisation.
Our contracts are, on average, around five years in
length, and as a consequence we do not generally hold
long-term, high-value assets that could beadversely
affected by climaterisks.
Climate change is considered under several principal
risks, including Health, Safety and Wellbeing (e.g. impact
of extreme weather), Catastrophic Incident (e.g. impact
of extreme weather) and Significant Impact of Policy
Change (e.g. impact of changes to US climate policy on
the success of meeting our Net Zero targets).
Read more in our Risk Management section on
page 66 andour Principal Risks and Uncertainties
section onpage 69.
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Risk and opportunity timeframes
Risk/Opportunity
term
Timeframe
(years) Reason for timeframe selection
Short 0–3
As per our principal risks and
viability statement
Medium 3–5 As per medium-term contracts
Long 5–30
As per longer-term contracts and
our/customer Net Zero targets
To determine which climate-related risks and
opportunities are most material for us, we annually
consult a group of core ESG, risk, insurance and finance
stakeholders from across the business, who judge a long
list of potential risks and opportunities and score using
our Climate Risk Scoring Matrix. These include physical
risks from extreme weather, changes in long-term
weather patterns, and transition risks from a policy,
legal,technology, market and reputation perspective.
Transition opportunities are scored from a resource
efficiency, energy source, products and services, and
market opportunity perspective. This provides a
judgement based on relevant scenarios, and a scoring
ofrisks as minor, moderate, major or severe, and
opportunities as minor, moderate, major or significant.
These risks and opportunities are then reviewed annually
by relevant Committees.
You can find more detail on the result of the 2025 annual
review on page 9 of our standalone TCFD Report on the
Impact section of our website. We continue to assess and
prepare for region-specific climate risk disclosure
requirements which may require climate risks and
opportunities to be evaluated at an entity or country level.
This includes Australian Sustainability Reporting Standard
requirements for our Australian operations for 2025.
Climate change resilience
We remain confident that focusing on the growing
business-to-government market within our existing
geographies and sectors remains the key to delivering
our medium-term goals. We continue to support our
customers on decarbonisation through a diverse range of
services and operational excellence, helping address
wider environmental challenges such as nature loss
where practicable. We will continue to provide services
that support government-led policies and primarily we
will continue to operate on customer assets in the
locations where the services are required, supporting
and aligning with customer-led Net Zero policies, supply
chain and climate resilience approaches as required.
As a Group, the current level of geographic and market
diversity of our operations helps to support our overall
resilience to climate change in the short to medium term
and presents us with the opportunity to shift our focus
should climate risk exposures escalate to material levels
in any given market, sector, or geography.
We are also an asset-light organisation, we do not
expect to have issues around redeploying and
repurposing existing assets. For example, the net book
value of our owned land and buildings is £5.4m at
31December 2025. For the majority of our contracts,
welease assets in line with the contract terms and the
average length of our contracts is five years. Our critical
accounting judgement on climate risk on page 172 sets
out more detail on how climate impact has been
considered within the financial statements.
Transition risk
The transition risk judged to be the most severe to Serco
is that of carbon pricing (International Energy Agency
model suggests a carbon pricing forecast of £103–£106
per tCO
2
e in advanced economies using the Announced
Pledges Scenario and Net Zero Emissions by 2050
Scenario respectively). The impact of both direct and
indirect carbon pricing is uncertain and, therefore,
remains an area of focus. In 2025, we engaged Green
Project Technologies to support the measurement of
oursupply chain emissions and through our Net Zero
Standard (see page 52) we commenced further
engagement with our suppliers on decarbonisation to
help build resilience and guard against the potential
impact of future carbon pricing risks.
Physical risk
Extreme weather events are anticipated to increase, as
shown by the established climate scenarios in the table
on page 63. We will continue to develop a greater
understanding of these physical risks, as well as long-
term chronic physical risks such as sustained higher
temperatures in our operating geographies. We have
experienced limited impact to date on operations and
insurance claims relating to extreme weather events.
However, this could change, and may require increased
engagement with customers on climate adaption
andresilience.
Transition opportunities
We recognise that we must continue to support
customer requirements and challenges where we have
influence, bringing focus and innovation through our
service provision and supply chain. In 2025, our UK &
Europe NZAP (see the Impact section of our website for
more details) has focused on the further deployment of
electric vehicles and low-carbon fuels along with
technologies to support energy efficiency, such as
vehicle telematics, which have also been deployed in a
proportion of our North American fleet. Climatize, part of
+impact (see page 50), has continued to deliver services
in the Middle East, building upon our established
services, such as in the recycling and low-carbon
transport sectors.
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Metrics and targets
We report a range of environmental metrics and targets
against our Planet pillar.
Metrics to assess climate-related risks and
opportunities, associated targets and data
areprovided in Our Impact - Data Tables on
pages238 to 243.
Strategy
We have formally committed to decarbonise our
business to reach Net Zero by 2050 or sooner. This
ambition is supported by our validated Science Based
Targets (SBTs), by the Science Based Targets initiative
(SBTi). Serco defines Net Zero as per the SBTi Corporate
Net Zero Standard:
Companies shall set one or more targets to reach a state
of net-zero emissions, which involves: (a) reducing Scope
1, 2 and 3 emissions to zero or a residual level consistent
with reaching net-zero emissions at the global or sector
level in eligible 1.5°C scenarios or sector pathways and
(b) neutralizing any residual emissions at the net-zero
target date – and any GHG emissions released into the
atmosphere thereafter.
Our SBTs provide a clearly defined focus to reduce
emissions in line with the 2015 Paris Agreement and
aresupported by our strategic CTP, which aligns with
theTransition Plan Taskforce Framework, and
operational NZAPs.
We continue to review investment opportunities which
support nature restoration, while also supporting carbon
removals to neutralise any unavoidable emissions
1
across Scopes 1–3, helping to meet our long-term
targets. We have used an internal shadow carbon price
range of between £25–£27 per tCO
2
e as per the UK
carbon price index published by the IUCN UK Peatland
Programme in collaboration with Scottish Forestry.
Climate scenarios
Our risks and opportunities draw upon some recognised climate scenarios and models, consistent with 2˚C and
lower, with a focus on 2030 and beyond.
Warming
trajectory
by2100 Transition scenarios Physical scenarios
1.5˚C
International Energy Agency (IEA) Net Zero
Emissions (NZE) This scenario assumes a rapid
transition to Net Zero as available technologies
deployed quickly and governments cooperate.
Not considered by models.
2-3˚C
IEA Announced Pledges Scenario (APS) This
scenario considers current government Net Zero
pledges (up to end August 2024) but are more
conservative, assuming that not all will be met.
Intergovernmental Panel on Climate Change (IPCC) SSP 2-4.5.
This scenario assumes medium challenges to mitigation and
adaptation. Institutions make slow progress in achieving
sustainable development goals and environmental systems continue
to experience degradation. Shift to sustainable lifestyles slow.
4˚C
Not considered by models. IPCC SSP 5-8.5. This scenario places greater emphasis on competitive
markets, innovation and participatory societies to produce rapid
technological progress toward sustainable development.
Globalisation and the exploitation of fossil fuels continue.
1. After reducing emissions by at least 90% to meet long-term science-based targets, companies are required to neutralise unabated emissions.
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Transitional
risk:
Policy and
legal
(including
reporting
and carbon
pricing)
Short
Direct costs:
• Cost attached to meeting increasing regulatory compliance requirements on climate and
wider ESG reporting.
Short –
Long
Indirect costs:
• We have considered a range of costs based on the impact of current and forecast carbon
pricing mechanisms which affect our supply chain and are indirectly passed down to Serco
and customers.
N/A
• The minimum range is based on 2025 supply chain costs and PwC’s ‘hidden cost of carbon’
tool. Current carbon cost is estimated using World Bank carbon pricing and a PwC model
(which uses data from 2014).
• The maximum range is based on 2025 supply chain costs and PwC’s ‘hidden cost of carbon’
tool and 2030 carbon prices implied by the Net Zero Emissions scenario.
• The EU and UK carbon border adjustment mechanisms are introducing tariffs from
1 January 2026 and 1 January 2027 respectively on carbon intensive products which are
imported. These costs will filter through supply chains, impacting our UK & Europe Division.
N/A
• It is unclear to what extent global carbon pricing mechanism costs will be transparent.
However, these costs are not expected to be fully funded by the Group as some would pass
through to our customers through indexation mechanisms, pricing of new contracts or
legislative changes.
N/A
Long
Direct costs (Scope 1–3):
• There are a range of costs related to us meeting our Scope 1 and 2 SBTs. These range from
investments in decarbonising our fleet, the built environment where we have direct financial
control from a carbon accounting perspective, and the switch to renewable energy.
N/A
• The minimum range assumes our Scope 1 and 2 emissions remain stable and our 46%
operational emissions reduction target is met. In that scenario we are exposed to costs
using the Announced Pledges Scenario carbon cost of £103 per tonne by 2030.
• The maximum range assumes 20% global growth in Scope 1 and 2 carbon emissions
through additional contract wins, with only 30% of our 46% operational emissions reduction
target being met. In that scenario we are exposed to costs using the Net Zero Emissions
scenario carbon cost of £106 per tonne by 2030.
• 2030 Net Zero transition costs for Scopes 1–3 relate to:
– Climate-focused teams across the Group
– External consultancy support
– Renewable electricity procurement
– Fleet transition
– Decarbonising buildings
– Carbon accounting system upgrades
– Supply chain engagement programme
– Nature-based solutions investment
• The majority is built into existing budgets and our five-year plan, which underpins any
impairment assessment for the elements within our control. External consultancy support
will further inform any budgetary requirements not yet accounted for.
N/A
• Managing decarbonisation through our contracts is dependent on our contractual
requirements. We do not expect to fund material changes to customer/landlord owned
infrastructure or assets.
N/A
• In some contracts, we are dependent on our customers investing in Net Zero infrastructure
and assets.
N/A
Transitional
risk:
Reputation
Short –
Long
• There are a range of costs dependent on our level of success in meeting potentially
increasing stakeholder expectations related to the Net Zero transition.
N/A
• The minimum range assumes that through our CTP and NZAP, we do not suffer any material
reputational damage or significant contract losses, and key customers and suppliers
support Net Zero by investing in decarbonisation efforts.
• The maximum range assumes that we fail to meet potentially increasing stakeholder
expectations and our Net Zero targets, and key customers and suppliers do not support
NetZero by investing in decarbonisation.
Risk
Time
horizon Description, scenarios, assumptions £ impact
Task Force on Climate-related Financial Disclosures
ComplianceStatement continued
Serco Group plc | Annual Report and Accounts 2025 | 64
Risk financial impact key
Very Low Low Medium High Very High
Reduction in underlying operating profit
Risk £m
< 0.5% 0.5–1% 1–2% 2–3% > 3%
Risk
Time
horizon Description, scenarios, assumptions £ impact
Physical risk:
Extreme
weather
Long
• We previously engaged a climate analytics consultancy to model flood and wind impacts
causing building and contents damage and causing downtime across 52 sites using
standard climate models for 2030 and 2050. The 52 sites were chosen based on criteria
agreed with some investors, including the risk of extreme weather (now and future), longer-
term contracts, higher revenue contracts, secure facilities with vulnerable people in our
care, and a mix of Serco leased/client sites from across the geographies and sectors in
which we operate.
• The output highlighted a collective, substantive level of financial risk for both the <2
degrees scenario and >4 degrees scenario.
• We have deemed these amounts not to be decision-useful for disclosure for the following
reasons:
– Serco operates a contract-based model and therefore we may no longer be operating
at the sites with the potential to be severely impacted by climate change in 2030. As a
result, long-term modelling is less decision-useful for Serco specifically.
– Modelled costs suggest that impacts would occur uniformly across all locations at the
same time and crucially do not take account of mitigation measures such as business
continuity planning or flood defence infrastructure which would significantly reduce
modelled numbers.
– Buildings, contents, and business interruption insurance would be in place to cover
many of the costs incurred. We have had limited insurance costs related to physical
risks on sites insured by Serco, noting the majority of our operating sites are insured by
customers or landlords. Insurance costs relating to our insured sites have not yet
experienced any material uplifts as a consequence of physical risk.
– Given the critical nature of most of the Group’s services, should business interruption
risks be prohibitively high, we would expect our customers to consider the location of
the sites and where services are provided.
• In 2025 we have worked with climate analytics consultancies with a view to consider
modelling again in 2026, based on a larger site list and updated climate models to provide
updated analysis across a wider range of climate perils.
• On customer sites where we hold facilities management responsibilities, we will continue
to support customers on climate adaption measures to address physical risks posed by
extreme weather.
N/A
Opportunity
Time
horizon Description, scenarios, assumptions £ impact
Net Zero
and
sustainability
enabling
services
Medium
• A range of underlying operating profit increase has been calculated based on the level of
success in expanding and growing sustainable services likely to be recognised by green
taxonomies.
N/A
• The minimum range assumes an increase in underlying operating profit by 2030 based on
modest growth and contracts likely to be eligible under green taxonomy criteria (which may
be externally assured in future).
• The maximum range assumes an increase in underlying operating profit by 2030 based on
higher growth plus additional contracts potentially eligible under green taxonomy criteria.
Switch to
low-carbon
fuels
Short -
Long
• Our vehicle and marine fleet operations contribute a significant amount to our own and our
customers’ emissions. Fuel costs are sometimes a pass-through cost to customers.
N/A
• Hydrotreated Vegetable Oil (HVO) remains a short-medium term opportunity for scaling
given it generally can be used as a drop in fuel in suitable diesel engines.
• Alternative low carbon fuels for UK marine fleet are expected to become more available at
scale between 2030–2050.
Task Force on Climate-related Financial Disclosures
ComplianceStatement continued
Serco Group plc | Annual Report and Accounts 2025 | 65
Opportunity financial impact key
Very Low Low Medium High Very High
Increase in underlying operating profit
Opportunity £m
< 0.5% 0.5–1% 1–2% 2–3% > 3%
Risk management remains a key focus of our Board and helps
shape our business decisions throughout all levels of the
organisation to help drive the right outcomes for our customers,
colleagues and wider stakeholders.
Risk management process
The Board oversees the Group’s risk management and
internal control processes within an Enterprise Risk
Management (ERM) framework, discharging its oversight
responsibilities through the Risk Committee, supported by
the Corporate Responsibility Committee, Audit Committee
and the ExCo. The Serco Inc. Audit Committee and our
Divisional Leadership teams also play a critical part in our
risk management process. The Board has monitored and
reviewed the effectiveness of risk management and
internal control systems through these Committees and
the ERM process. Risk management operates at all levels
of the business with a mandated ‘bottom up/top down’
approach with formal quarterly reporting updates, as
shown in the table opposite. The ERM framework is
facilitated by the Group ERM team and supported by
Divisional colleagues.
The management of our key controls forms a critical
partof our ERM framework. Group and Divisional
Compliance Assurance teams operate as a second line
function to ensure appropriate focus on the articulation,
monitoring and testing of key controls, supported by
documented policies and procedures held within our
Serco Management System. An annual programme
ofwork focuses on the validation and testing of key
controls to supplement annual control self-assessments
and biannual compliance assurance attestation
statements. Some larger contracts and business units
also have embedded risk and assurance resources
tostrengthen our first line focus on controls design
andoperation. This first and second line activity is
augmented by our third line Internal Audit assurance
work and additional external partners provide support in
certain specialist areas. Significant third line assurance
activities and audits are also delivered through external
third parties to support certification standards and
customer requirements in our varied service lines and
business units. These include those that support the
ISOcertifications we hold as well as independent
performance and regulatory reports on Serco
operations. Examples of such reviews include Aviation
Air Traffic Services, Vessel reviews, Fleet Operating
Licence and related inspections. A key element of our
control environment in our North America Division is
compliance with the Special Security Agreement we have
with the US Government, which is managed by dedicated
resources and oversight delivered by the Serco Inc.
AuditCommittee.
Risk Management
Serco Group plc | Annual Report and Accounts 2025 | 66
Proactive risk management
underpins our strategy and
business performance
Risk management life cycle process
The schematic below shows key activities at each stage in our risk management life cycle.
• Assigning responsibility and ownership for risk
management implementation and management
oversight
• Risk Committee setting and reviewing Risk Appetite
Statements and Risk Tolerance for Principal Risks on,
at least, an annual basis
• Setting a target risk position to determine objectives
for mitigating actions
• Divisional, Business Unit, Contract and Functional
teams annual planning
• Agreeing ExCo Risk sponsors and dedicated subject
matter experts to support risk updates and
challenge
• Risk and Audit Committees’ oversight of the
business’s readiness activities through our
Integrated Assurance Framework (IAF) programme
in relation to reporting against Provision 29 of the
Corporate Governance Code (the Code)
• Identifying risks associated with the achievement of
our business objectives including risks from external
factors inherently associated with the environment in
which we operate, and internal risks arising from the
nature of our business
• Bottom-up risk identification from functions and
contracts upwards including operational, financial,
compliance and strategic risks
• Updating risk registers with causes and
consequences
• Divisional, ExCo and Risk Committee identification
of emerging risk areas considering internal and
external themes and trends
• Assessing the level of inherent and residual risk
exposure based on a standardised assessment
methodology of likelihood and impact, reflecting the
effectiveness of current implemented controls in
place to mitigate the risk
• Bottom-up risk assessment from business functions
and contracts upwards against Group-defined
criteria, using the likelihood and impact of a risk
manifesting on a worst case credible scenario basis
• Formal quarterly assessment of risks from the
Divisions, including risks that have been escalated
up from the contracts, functions or business units
• Identifying and implementing mitigations and
control improvements that seek to reduce the
material risks to the target risk position aligned to
our risk appetite
• Development and implementation of improvements
following lessons learnt where we have encountered
issues or when risks have materialised
• Continued operation of mitigating controls
• Monitoring risk mitigation actions and their impact
and monitoring changes to our business and the
external environment, including emerging risk
themes and operational issues
• Formal quarterly update on the principal risks and
outcomes from the compliance assurance testing
activity reported to the Risk Committee, Corporate
Responsibility Committee, Audit Committee or Board
• Board Committee oversight of Divisional risk deep
dives and principal risk deep dives on a rotating
schedule (typically annually). Independent review
and challenge forms part of the role of the Group
ERM teams and Committee members
• Audit and Risk Committee compliance assurance
testing programme oversight detailing testing of
specific risk controls and mitigation progress
• Reporting the status of material risks and associated
controls from contracts upwards through business
units and Divisions to seek assurance the business
risks are being appropriately managed and reviewed
• Updates on principal risks by the Chair of the Risk,
Audit and Corporate Responsibility Committees to
the Board following each quarterly meeting
• Reporting of any material risks that have materialised
or significant control failures to ensure that lessons
learnt are identified
• Development of our approach to support future
reporting requirements as part of the changes to
theCode
Risk Management continued
Serco Group plc | Annual Report and Accounts 2025 | 67
Emerging risks
We recognise our risk profile is not static as the business
is exposed and responds to internal and external threats
and uncertainties. As part of an annual review with the
ExCo and the Risk Committee, we complete a robust
assessment to identify and monitor emerging risks to
ensure that adequate steps are being taken to
understand and mitigate them, and to assess any
impacton our principal risks.
Examples of some of the current emerging risks trends
being monitored include continued geopolitical
disruption, worsening security situations and political
volatility, including any associated ideology or significant
policy changes.
Other risk areas
We continue to review our approach to ESG (including
climate change) risk exposure and do not include ESG or
climate change as standalone principal risks noting that
our material ESG topics within our DMA are considered
under various principal risks.
Our disclosed climate risks are identified using our Group
standard risk assessment process and scoring matrix.
Read more in our Impact report on page 34.
For more information on our approach and
disclosures canbe found in our TCFD
Compliance Statement onpages 60 to 65.
Preparation for Provision 29 of the Code
As outlined in our 2024 Annual Report, we continue to
prepare for the changes under Provision 29 of the Code,
through our IAF programme.
Over the last 12 months we have determined the route
to identify our material controls focusing on the largest
strategic risks we face, which are already embodied in
our existing principal and enterprise level risks. Using a
robust and structured approach, with input from our
subject matter experts and ExCo sponsors, wereviewed
the causes for each principal risk and determined our
key controls from that basis. These continue to evolve
through a process of ExCo and BoardCommittee review
to ensure we have the right material controls for our
business captured for our futureattestation.
As part of this, we have completed pilot testing of our
material controls and we have plans in place to provide
any additional supporting evidence needed by the
Board to support their controls attestation. We will be
reporting this in our 2026 Annual Report.
For more information and how this has been
reviewed by the Board – see the Risk Committee
Report on page 103.
Risk Management continued
Serco Group plc | Annual Report and Accounts 2025 | 68
Summary of principal risks and uncertainties
Our principal risks are those risks that we determine to
be the most material when considered against our key
priorities,bringing a potential to materially affect the
performance, prospects or reputation of the business.
They have been reviewed using our ERM framework as
outlined in previous pages.
For each principal risk we capture the inherent, residual
and target position is assessed against a standard set of
impact categories on a worst case credible scenario
basis. The likelihood of each risk occurring is then
assessed, resulting in a final risk position that enables us
to rank the risks from minor to severe. Every principal risk
has a risk appetite statement to determine the nature
and amount of risk the Group is willing to accept. This is
shown against each principal risk. This risk appetite
position is set through discussion with the Risk
Committee. As part of simplification we have revised our
risk appetite statements, reducing from four to three
categories - averse, cautious and flexible. The new
statements include our approach to controls to reflect
the Board’s tolerance to each risk.
Each principal risk also shows the linkage to the relevant
key priorities. Appropriate consideration and
management of the principal risks have a link to
Executive remuneration as outlined in the Directors’
Remuneration Report on page 105 and achievement of
our KPIs as shown on pages 18 and 19.
Following the annual principal risk review with the
ExCoand the Risk Committee we have made the
following changes:
• new principal risk: Significant Impact of Policy Change
– addition of a new risk recognising the threats
associated with macroeconomic, political and
geopolitical uncertainty and the impacts that these
uncertainties may have on both our current and future
portfolios and pipeline;
• amended principal risk: Impact of Emerging or
Disruptive Technology – refocused the Strategic
Technology risk to focus on the impact of AI and
disruptive technology; and
• amended principal risk: Contract Non-Compliance,
Non-Performance or Misreporting – re-merged
Contract Performance back into the existing risk of
Contract Non-Compliance and Misreporting driven by
the acknowledgement that there is significant overlap
between the controls between the two risks when they
were standalone.
Principal risks are considered over the same three-year
timeframe as the Viability Statement set out on page 76,
which takes account of the principal risks in
itsassessment.
In addition to the principal risks and uncertainties
already identified, there may be other risks, either
unknown, or currently believed to be immaterial, which
could evolve to be material. These risks, whether they
materialise individually or simultaneously, could
significantly affect the Group’s business and
financialresults.
Each of our principal risks supports one or more of
the key priorities that drive delivery of our strategy –
see page 13:
Growth
Competitiveness
Operational Excellence
The trend indicator depicts the trend of our residual
risk rating internally over the course of 2025
Increase
Decrease
No change
New or refocused
Principal Risks and Uncertainties
Serco Group plc | Annual Report and Accounts 2025 | 69
Failure to Grow Profitably
Risk appetite: Cautious Risk trend:
This risk considers the potential impact of failure to win material bids or a lack of opportunities in our chosen markets, restricting revenue
growth which may in turn have an adverse impact on Serco’s profitability. Sustainable growth requires us to identify where and how to create
opportunities for new work while retaining and expanding our current portfolio of contracts. This includes having a deep understanding of
our market and macroeconomic environment through to managing our pipeline, bidding and converting opportunities into value
generating work.
Risk context
Our revenue in 2025 increased slightly compared to 2024.
Headline growth of 2% was supported by the acquisition of MT&S.
We also saw 1% organic growth this year, despite headwinds in
keymarkets and the ending of some large contracts. Underlying
operating profit decreased slightly to £272m (2024: £274m), taking
margins to the top-end of our target range of 5%–6%. This reflects
our efforts to drive productivity in our existing contracts and actively
shape our portfolio to focus on the most attractive sectors
(suchasDefence).
Demand in our areas of operations remains robust. This is reflected
in the strong order intake (£5.5bn) and pipeline (£12.1bn) which
give us confidence that we should deliver profitable growth in the
coming years.
That said, the markets in which we operate are complex and policy
changes, geopolitics, and fiscal pressures continue to create risk.
For example, in 2025 in the US, the Department of Government
Efficiency followed by the Government shutdown presented a risk
to current contracts and the cancellation of future bids. However, as
these results demonstrate, our balanced portfolio both sectorally
and geographically help mitigate such risks by allowing us to focus
efforts in areas where profitable growth is most achievable.
Example mitigations
• Geographical and sector diversification helps protect against
concentration risk.
• Investment Committee, Business Lifecycle Review Team (BLRT) and
bid governance process.
• Serco Group and Divisional business strategy reviewed annually
with ExCo and Board.
• Monthly Divisional Performance Reviews include oversight of key
growth metrics.
• Monitoring of customer satisfaction or similar and using relationship
management systems to determine trends.
• Monitoring of lead indicators and KPIs, including order book and
book-to-bill, bid submissions and win rates.
• Monthly monitoring of qualified and non-qualified pipeline at
Group and Divisional level and additional reviews in bi-weekly
Growth team meetings.
Oversight by: Board, Risk Committee and ExCo
Executive sponsor: Anthony Kirby, Group Chief Executive
Significant Impact of Policy Change
Risk appetite: Cautious Risk trend:
As a business focused on delivering solutions for government, we are inherently affected by policy and regulatory changes across all our
geographies. This can impact on our business in multiple ways including creating opportunities, as well as disrupting our business plans,
execution of existing services and delays to awards.
Risk context
There are many factors that may lead to this risk manifesting that
are outside of Serco’s control. Fundamentally, the spread of our
portfolio across geographies and sectors is central to mitigating
this risk – ensuring we are not overly exposed to a single policy.
Alongside this organisational design, through strong customer
relations we seek to inform decision-making with insights from our
operations. Our mitigations, however, are largely focused on
managing the potential impacts to ensure we remain resilient to
change, allowing us to deliver our vital services to customers.
In addition, we proactively monitor sentiment to anticipate changes
that may impact on our services and result in changes in political
leadership and priorities.
Example mitigations
• A diverse portfolio of contracts, reducing exposure to a single
geography or sector’s policy and regulatory regime.
• Activity of Divisional Government Relations functions, focusing on
engaging key stakeholders in the policy-making process,
influencing policy and working with interest groups.
• Use of external professional customer and government relations
experts to help us inform the policy-making process and clearly
communicate expert advice.
• Commissioning of think tanks and external organisations to
conduct research to understand and validate societal trends, public
attitude changes and potential risks.
• Serco’s membership of advocacy and industry groups.
Oversight by: Board, Risk Committee and ExCo
Executive sponsor: Anthony Kirby, Group Chief Executive
Principal Risks and Uncertainties continued
Serco Group plc | Annual Report and Accounts 2025 | 70
Major Information Security Breach
(including cyber-attack and data protection) Risk appetite: Averse Risk trend:
An information security breach, resulting in the loss or compromise of information (including personal or customer data) or wilful
damage, is a key risk for us. A successful attack or significant control failure may result in significant reputation damage, regulatory fines,
loss of customer or data subject confidence and follow-on civil claims. We operate an averse risk appetite to any major data breaches and
cyber-attacks.
Risk context
Acknowledging the multifaceted nature of our operations, the
prevailing geopolitical risks and the heightened trend and
sophistication of the threats confronting us, the current residual risk
placement remains elevated at severe noting the potential for a
significant impact should a major breach ever materialise. Strong
mitigation continues with a programme of continued investment
and a focus on strengthened IT device controls, and the continued
execution of good practice.
The Group is reliant on the effectiveness of mitigating controls that
seek to avoid a breach and our security approach is based on good
industry practice, seeking to adhere to government and
international security standards, such as the worldwide recognised
National Institute of Standards and Technology (NIST) cyber
security framework along with customer accreditations appropriate
to each region. We also rely on key third parties whose failure due
to a cyber-attack could impact our ability to deliver contract services
or expose sensitive data due to a failure in a supplier’s cyber and
data controls.
Example mitigations
• Global Governance Boards to manage processes and exceptions.
• Divisional solution reviews overseeing implementation of new
technology.
• Internal Security Standard including minimum control areas being
implemented across the Group.
• Contract and Divisional aligned controls to meet customer
specified security obligations.
• 24-hour Security Operations Centre monitoring alerts and
incidents.
• Specialist information security and data privacy officers in all
Divisions supported by data protection and security awareness
training.
• Risk-based third-party material supplier cyber assessments.
• Crisis management and business continuity processes.
Oversight by: Board, Risk Committee and ExCo
Executive sponsor: Tom Read, Group Chief Technology and Digital Officer
Impact of Emerging or Disruptive Technology
Risk appetite: Averse Risk trend:
Artificial intelligence (AI) and automation are beginning to impact our industry, creating opportunities to streamline operations, reduce costs
and enhance service delivery. At Serco, we are likely to see the impact primarily in a more competitive cost environment, with people-heavy
services being partly replaced by AI agents and automated processes. In parallel we expect to see new entrants to our markets, with
advanced technology companies seeking the consistent revenue streams of government contracts.
Risk context
Technology is evolving rapidly, with advances in AI redefining the
art of the possible each year.
While some industries like media and advertising are likely to be
heavily disrupted over the coming years, we currently expect that
Serco’s core business is unlikely to change fundamentally. However,
we are likely to see a significant reduction in the cost of providing
certain services, and government customers are increasingly
looking for evidence of innovation in bids. A failure to respond
tothis evolving expectation would represent a significant risk to
ourbusiness.
We are responding to this by strengthening our digital leadership,
building internal AI capability, and developing strong strategic
partnerships with cutting-edge technology companies.
Example mitigations
• A new AI Council governance group was established in 2025 to
monitor AI progress and risks across the Company.
• Strengthened digital leadership, including a new Group Director of
Digital & Engineering who leads on AI, digital and innovation.
• Multi-year technology modernisation roadmap with dedicated
investment plan and clear milestones.
• Formal partnerships with strategic technology companies to
leverage their capital investment and innovation pace.
• Automation strategy and implementation programme and
governance to drive operational efficiency.
• Quarterly divisional tech reviews focus on AI and disruptive
technologies as standalone agenda items to ensure each Division
delivers on strategic investment.
• Technology skills development and recruitment strategy.
• Business continuity and resilience plans for critical systems.
Oversight by: Board, Risk Committee and ExCo
Executive sponsor: Tom Read, Group Chief Technology and Digital Officer
Principal Risks and Uncertainties continued
Serco Group plc | Annual Report and Accounts 2025 | 71
Contract Non-Compliance, Non-Performance or
Misreporting
Risk appetite: Averse Risk trend:
Serco is a complex and diverse business with a significant global spread. We are a people-led business delivering against more than 650
contracts relying on thousands of colleagues knowing what they should be doing and, when and how they should be reporting. This risk
recognises that if we fail to comply with a requirement, fail to deliver the required performance or fail to report something accurately that
there could be a significant financial or reputational consequence from such failures.
Risk context
We operate a large complex business, trusted to deliver public
services with obligations and performance standards captured in
largely bespoke contractual documentation.
We run our business through a hierarchy of contract managers,
operations managers, business unit managing directors and
divisional functional leads. Most operational risks/day-to-day
management issues are captured through the deployment of
contract team roles and responsibilities.
Despite management oversight there is a risk that something gets
missed. For example a billing error; a misinterpretation of a
requirement; a drift away from the original contract requirement or
a failure in our supply chain.
Our approach is to put in place guardrails to keep us on track. Key
components of our control environment include a contract
management application (CMA) and process to help us make sure
we do not forget non-day-to-day items; a key performance indicator
method statement for our larger contracts, reviewed at least
annually, to make sure we are confident with what we are delivering
and that we are reporting accurately. These are then followed up by
our divisional assurance reviews and Group internal audits.
Example mitigations
• Contract obligations procedure including maintenance of up-to-
date copies of contract, contract variations and key regulatory
requirements. Tracking the delivery of obligations on our CMA for
larger contracts and reporting in Divisional and business unit
performance reviews.
• Procedures for measuring and reporting performance, agreeing
KPI definitions with customer, training delivery teams on delivering
and reporting processes.
• Ongoing tracking and reporting performance of contracts through
monthly and annual performance reviews.
• Strong, meaningful and understood Values and required
behaviours, which are defined in mycode, supported by the right
tone from leaders.
Oversight by: Risk Committee and ExCo
Executive sponsor: Phil Malem, Chief Executive Officer, Middle East
Significant Failure of the Supply Chain
Risk appetite: Cautious Risk trend:
If we fail to fulfil customer and legal obligations, deliver essential operations or win new business due to a significant failure in the supply
chain we recognise that we may experience financial losses, operational disruptions and reputational damage. This supply chain failure
risk includes poor supplier performance and resilience and links with risks associated with cybersecurity and data protection issues,
health, safety and environmental incidents, and ethics and compliance breaches.
Risk context
Managing our large and diverse supplier base remains a critical
task for Serco due to the existence of more complex, globalised
supply chains. We recognise an increasing risk of disruption from
certain parts of the world with geopolitical uncertainty creating an
unpredictable environment for global supply chains, as well as
economic uncertainty and inflation leading to higher costs affecting
labour availability. In addition, the rise in cyber threats poses
significant risks to supply chain security as attacks can target critical
infrastructure and data.
Despite these risks we have not experienced any material
disruptions across the Group and therefore consider the risk trend
as stable.
Example mitigations
• Procurement policy, standards and procedures including supplier
code of conduct processes.
• Global working to deliver best practice and consistency in
approach for:
– effective supplier onboarding and ongoing monitoring;
– cyber and information security third party risk management; and
– business critical supplier management including business
continuity planning.
• The use of Serco standard contracts where possible including
appropriate obligations, KPIs and service level agreements.
• A supplier management framework focusing on key risk themes
including supplier resilience, cyber and information security, ethics
and compliance due diligence and monitoring, health and safety,
and the environment.
Oversight by: Risk Committee and ExCo
Executive sponsor: Helen Shaw, Interim Chief Executive Officer, UK & Europe
Principal Risks and Uncertainties continued
Serco Group plc | Annual Report and Accounts 2025 | 72
Failure to Act with Integrity
Risk appetite: Averse Risk trend:
We recognise a risk of corrupt, illegal or dishonest behaviour by individuals within or connected to our organisation. A material failure to act
with integrity or significant control failure could result in regulatory fines or other penalties, damages claims, legal action against individuals
and the Company, and the potential loss of ability to bid, win or retain contracts. A failure could also adversely impact colleague
engagement and the confidence of customers, investors and other stakeholders.
Risk context
We are committed to operating with integrity and are averse to
behaviours and actions that might compromise this. We recognise
that, as a provider of frontline public services, we are subject to
public scrutiny and challenge, and that there may be occasions
where ‘things go wrong’. In such situations, we seek to minimise
theimpact of any failure, accept responsibility and take appropriate
action. We have no tolerance for any significant breach, in
particularany which could result in prosecution, regulatory or
government censure.
Emerging risk considerations include increasing legislative and
regulatory requirements, for example, the UK Corporate Criminal
legislation. Geopolitical tensions can rapidly impact areas such as
trade sanctions. Changing priorities in enforcement focus of
governments and regulators also impact the risk. Potential
pressures which might drive inappropriate behaviour can be driven
by inflationary and economic challenges, increasing mental health
risk and higher medium-term levels of colleague attrition.
Despite the increases in regulatory requirements, these are
generally introduced gradually or do not impact significant areas of
our business and are part of the general environment in which we
operate. These pressures are known and taken into account in the
ethics and compliance programme. We do not therefore consider
these factors to move the overall position of this risk which we see
as stable.
Example mitigations
• Our Values and a positive culture of integrity, supported by the
right tone from leaders.
• Robust governance exercising oversight of our Ethics and Integrity
(E&I) programme including “Non-Executive Director-only” sessions
with Divisional ethics leads at the Corporate Responsibility
Committee.
• Maintaining an effective E&I programme including clear required
behaviours, defined in mycode and supported by compliance
procedures, tools, frameworks and platforms.
• Independent Speak Up service supported by Corporate
Investigation teams.
• Mandatory Serco Essentials training covering E&I topics.
• E&I teams in each Division.
• Third-party due diligence on key customers, suppliers and high-risk
third parties to identify regulatory non-compliance, and other
potential risks such as sanctions.
Oversight by: Corporate Responsibility Committee, Risk Committee and ExCo
Executive sponsor: Anthony Kirby, Group Chief Executive
Principal Risks and Uncertainties continued
Serco Group plc | Annual Report and Accounts 2025 | 73
Health, Safety and Wellbeing
Risk appetite: Averse Risk trend:
The diversity of services provided by Serco exposes our employees, customers and third parties to a wide range of health, safety and
wellbeing (HS&W), and physical security risks inherent to our operations. This risk also includes psychosocial, environmental and societal
concerns that may impact the safety and wellbeing of our employees, partners and those in our care. Additional considerations include
climate concerns recognising that extreme heat, flooding or other extreme weather events may impact the safety, wellbeing and security
of our employees, customers and service users. A breach of health and safety regulations or failure to meet our contracted expectations
could disrupt our business and lead to prosecution and/or contractual, financial, regulatory and reputational costs.
Risk context
Our vision is Zero Harm. We have an averse risk appetite for actions
and/or failures that could cause serious injury or loss of life. Despite
a strong performance when considering our KPI for HS&W, as
shown on page 19 (LTIFR reduction of 26% during the year) we
recognise that we cannot eradicate risk entirely while maintaining
operational delivery and we therefore consider the risk trend as
stable. We continue to prioritise prevention of major injuries and
threats to wellbeing and security, while tolerating that minor injuries
will occur on occasion but are minimised by appropriate controls.
Our HS&W risk has the potential to impact or interconnect with
several principal risks. Societal changes fuelled by a combination of
factors including cost-of-living pressures, challenging media
coverage and increasingly volatile and diverging political dialogues
can directly impact our workforce, for example by exacerbating the
personal security risks that they face.
Continuing to meet these developing people, compliance and
security needs and mitigating their impact will be a key challenge
for the organisation through 2026.
Example mitigations
• HS&W strategy and Safety Management System mandated in policy
and implemented in each Division, including task-based enhanced
risk assessments.
• Effective use of technology, data and information to drive
improvements including global roll-out of a psychological H&S
injury metric.
• Updated HS&W training, communication and guidance, in addition
to mandated Group-wide safety training (delivered via Serco
Essentials) and Licence to Lead content, with completion captured
and reviewed.
• Spontaneous and planned preventative, maintenance, audit, and
inspection through a programme of first, second- and third-line
assurance activities.
• Role-specific training, based on site and task-specific risk
assessment findings and control measures.
• Incident reporting and investigations through effective use of
reporting and compliance systems.
• Continued growth of the review and sharing of lessons learnt
throughout the global organisation.
• ISO certifications including but not limited to ISO 9001, 45001
and45003.
Oversight by: Board, Corporate Responsibility Committee, Risk Committee and ExCo
Executive sponsor: Gillian Duggan, Group Chief People and Culture Officer
Principal Risks and Uncertainties continued
Serco Group plc | Annual Report and Accounts 2025 | 74
Catastrophic Incident
Risk appetite: Averse Risk trend:
Given the nature of our business, we are exposed to the risk of a significant event (incident or accident) occurring as a result of Serco’s
actions or failure to effectively respond to, or prepare for, an event that results in multiple fatalities, significant legal investigation or
prosecution, severe property/asset damage/loss, very serious environmental impact, or significant reputationaldamage.
Risk context
Each Division continues to assess risks at a contract level, to ensure
that relevant material risks have been identified and mitigated
appropriately. Key risk information that may contribute to a
catastrophic incident is also covered in other principal risk
descriptions e.g. the Health, Safety, Environment and Wellbeing
elements of this risk are included in the Health, Safety and
Wellbeing principal risk. Further detail on our approach to the
physical risks linked to climate change-related events can be found
in our TCFD Compliance Statement on pages 60 to 65.
Given our average contract length, there tend not to be large
fluctuations in this risk and we consider the risk trend to be stable.
We continue to work with some of our key insurance brokers to
leverage impact scenario analyses they have conducted, to see
what potential risk quantification changes they project e.g. climate
change. This helps ensure that the insurance limits purchased
remain adequate, given insurance is one of the key mitigations for
this risk.
Example mitigations
• HS&W and environmental strategies and Safety Management
System (policies and procedures).
• Safety training (included as part of Serco Essentials) and
individualdevelopment plans and processes based on role and
operational risk.
• Effective incident/near-miss investigations and effective use of
ASSURE (independent reporting and compliance system).
• Business continuity, crisis and incident emergency response plans
and testing.
• Risk transfer via prudent insurance cover where appropriate.
Oversight by: Risk Committee and ExCo
Executive sponsor: Michael LaRouche, Chief Executive Officer, North America
Material Legal and Regulatory Compliance Failure
Risk appetite: Averse Risk trend:
Serco operates in complex legal and regulatory environments across multiple industries and geographies and there is a risk that the
Company might not comply with all relevant laws and regulations. Failure to comply with laws and regulations may cause significant loss and
damage to the Group and harm to people including exposure to regulatory prosecution and fines, reputational damage and the potential
loss of licences and authorisations, all of which may prejudice the prospects for future bids and contracts. Defending legal proceedings may
be costly and may also divert management attention away from running the business for a prolonged period. Uninsured losses or financial
penalties resulting from any current or threatened legal actions may also have a material adverse effect on the Group.
Risk context
We remain subject to a fast-moving and complex global legal and
regulatory environment, and Serco is subject to investigations and
potential claims which involve legal proceedings. We remain
vigilant to the increasing threat of class action litigation.
In addition, various laws and regulations that apply across the
business continue to be subject to increased focus and attention,
including anti-bribery and corruption laws, market abuse
regulation, data and privacy laws, sanctions and trade compliance,
competition and antitrust, human rights, modern slavery and
employment laws. We are averse to risks which may result in legal
and regulatory non-compliance and have processes in place that
seek to minimise regulatory and legal action, as well as targeted
and selected assurance activity.
Example mitigations
• Embedded internal and external legal and other subject matter
experts for example, HR, with responsibility for monitoring and
understanding legal and regulatory obligations and risks.
• Dedicated Legal teams at Group level and in Divisions aligned to
business and operations.
• Updated Investment Committee and Business Lifecycle Review
Team bid process and governance.
• Third-party due diligence on key customers, suppliers and high-risk
third parties.
• Group-led compliance processes and training including Speak Up
andmycode.
• Mandatory Serco-wide training delivered through Serco Essentials
as well as targeted roles-based and ad hoc training on specific
legalareas.
• Annual and half-year compliance statements attesting material
compliance with laws and regulations.
• Group-wide compliance programmes including FraudPrevention.
Oversight by: Risk Committee and ExCo
Executive sponsor: Amanda Miller, Group General Counsel and Company Secretary
Principal Risks and Uncertainties continued
Serco Group plc | Annual Report and Accounts 2025 | 75
In accordance with Provision 31 of the Code, the Directors have
assessed the prospects of the Group over the three-year period
to31 December 2028.
Period of assessment
While the Group operates many long-term contracts,
thenature of the Group’s business relies on continued
bidding activity and contract wins in order to sustain its
revenue streams and facilitate growth. The pipeline of
contract opportunities is carefully managed, however the
outcome of bid submissions is binary and the Group uses
past experience and estimated win rates to provide short-
term budgets against which performance is measured.
Asa result of the estimates used in developing the
Group’s forecast, it remains challenging to develop
detailed projections against which the Group’s viability
can be assessed.
Therefore, the Directors believe that a three-year period
is appropriate since it reflects the fact that short-term
projections can be heavily reliant on successful bidding
opportunities which have a binary outcome and the Group
has limited visibility of contract bidding opportunities
beyond three years given the lead times which generally
exist before opportunities come to market.
Although longer periods are used when making
significant strategic decisions, the assumptions used in
the latter years become inherently more uncertain. When
considering the uncertainty around the timing of contract
bidding explained above, the Directors have concluded
athree-year period is the most appropriate for the
viability assessment.
Financial forecasts
In assessing the prospects of the Group over the viability
period, the Directors have also considered the Group’s
current financial position as well as its financial
projections in the context of the Group’s debt facilities
and associated covenants. These financial projections,
which have been approved by the Board, are based on a
bottom-up budget exercise for 2026 and 2027, and a
higher-level forecast for 2028 based on key assumptions,
such as current contracted revenue and assumed win
rates applied to new business and rebid opportunities.
The Group’s covenant net debt balance at 31 December
2025 is £229.2m. The Group’s base projections indicate
that debt facilities and projected headroom are adequate
to support the Group over the period to 31 December
2028. The Group’s financial plan has been stress-tested
against key sensitivities which could materialise as a result
of the crystallisation of one or a number of the principal
risks, the objective being that the future viability of the
Group is tested against severe but plausible scenarios.
Funding facilities
At 31 December 2025, the Group’s principal debt
facilities comprised a £350m revolving credit facility
maturing in November 2027 (of which £nil was drawn),
and £408.6m of US private placement notes (USPP
notes). The principal financial covenant ratios are
consistent across the private placement loan notes and
revolving credit facility and are outlined on page 235.
The Group refinanced its revolving credit facility at the
end of 2022 and the associated five-year funding facility
provides the financial platform to continue to invest in the
growth of the Group. The refinanced bank debt expires
during the three-year assessment period and the viability
assessment assumes that it will be refinanced on similar
terms. The Directors are of the opinion that refinancing
the debt to at least a level that would allow the Group to
remain viable is an achievable outcome.
During the period of assessment, £59.4m of the Group’s
USPP notes mature. The long-term forecasts supporting
this statement show that, on the assumption that these
are repaid and no further refinancing occurs after the
date of the approval of these financial statements, there
isstill sufficient liquidity headroom for the Group to
remain viable.
Viability Statement
Serco Group plc | Annual Report and Accounts 2025 | 76
Risks
The Board and the Group Risk Committee continue to
monitor the principal risks facing the Group, including
those that would threaten the execution of its strategy,
business model, future performance, solvency and
liquidity. The potential outcome, management and
mitigation of those principal risks have been taken into
consideration when modelling sensitivities to assess the
future viability of the Group. The Group’s risk review is set
out on pages 69 to 75 and outlines the Group’s principal
risks and mitigating controls that are in place.
Severe but plausible downside scenarios
Due to the Group’s long-term contracting nature, the
sensitivities tested include a reduction in the win rates for
rebids, extensions and the pipeline of new opportunities;
a reduction in delivering margin improvements; and a
potential penalty arising from risks such as a major
information security breach or a material legal and
regulatory compliance failure.
A reverse stress test of the Group’s profit forecast has
been completed using different assumptions of new
business and rebid win rates and the Group’s profit
margin. This analysis shows that the Group can afford to
be unsuccessful on 60% of its forecasted new business
and rebid wins combined with a profit margin 125 basis
points below the Group’s forecast, and the Group will still
have sufficient liquidity available throughout the
assessment period. This assumes that all USPP notes are
repaid during the period, and that the Group’s revolving
credit facility is refinanced on similar terms. May 2026 is
the point with the lowest amount of liquidity headroom
based on sensitivities within the forecast outlined above,
against which the reverse stress test has been applied.
The Group has won 91% of its rebids and available
contract extensions over the last two years by volume,
therefore a reduction of 60% or more to the forecasted
win rates and rebid rates is not considered plausible.
These sensitivities will change in line with the Group’s
order book and contract performance going forward,
including new contract wins and losses. However, the
Group’s ability to absorb impacts of this scale within its
existing financing arrangements supports the
assumptions applied in this Viability Statement.
Mitigations
It is considered unlikely, but not impossible, that the
crystallisation of a single risk would test the future viability
of the Group; however, unsurprisingly, and as with many
companies, it is possible to construct scenarios where
either multiple occurrences of the same risk, or single
occurrences of different significant risks, could put
pressure on the Group’s ability to meet its financial
covenants. At this point, the Group would look to address
the issue by exploring a range of options including,
among others, a temporary or permanent renegotiation
of the financial covenants, disposals of parts of the
Group’s operations to reduce net debt and/or raising
additional capital in the form of equity, subordinated
debt or other such instruments.
Conclusions and assumptions
Subject to these risks, and on the basis of the analysis
undertaken, the Directors have a reasonable expectation
that the Group will be able to continue in operation and
meet its liabilities as they fall due over the three-year
period of their assessment. In doing so, it is recognised
that such future assessments are subject to a level of
uncertainty that increases further out in time and, therefore,
future outcomes cannot be guaranteed or predicted with
certainty. The Directors have made the following key
assumptions in connection with this assessment:
• there is no significant unexpected contract attrition of
existing work that becomes due for extension or rebid
over the next three years;
• there is no significant reduction in scale of existing
contract operations as a result of customer policy or
other changes;
• the Group is able to refinance the £350m revolving
credit facility which matures during the assessment term;
• there is no significant deterioration in new business and
rebid win rates from those anticipated;
• the Group is able to continue the execution of its
strategy of growing revenue and profits; and
• the Group is not subject to any material penalties,
claims, litigations, direct and indirect costs and/or
debarment from bidding for new contracts.
Viability Statement continued
Serco Group plc | Annual Report and Accounts 2025 | 77
In this section we present information on how we’re complying with
the non-financial reporting requirements in Sections 414CA and
414CB of the Companies Act 2006.
Non-financial information Principal locations in this Annual Report
Environmental matters
Climate change and sustainability
Impact report: Planet
TCFD Compliance Statement
Risk Management and Principal Risks and Uncertainties
Corporate Responsibility Committee Report
Our Impact – Data Tables: Planet
49–54
60–65
66–75
104
241–243
Employees Impact report: People
Risk Management and Principal Risks and Uncertainties
Corporate Responsibility Committee Report
Our Impact – Data Tables: People
37–44
66–75
104
238–240
Social matters (see also: content relating
toEmployees, above)
Impact report: Place
Impact report – Data Tables: Place
45–48
240
Anti-corruption and anti-bribery
Human rights (including slavery and
humantrafficking)
Impact report: Governance
Risk Management and Principal Risks and Uncertainties
Corporate Responsibility Committee Report
Our Impact – Data Tables: Governance
55–59
66–75
104
243
Strategy Our Strategy 12–17
Market Our Markets 10–11
Corporate Governance Directors’ Report 79–134
Our Group policies are available on our website, including those relating to the Environment; People; Health,
Safetyand Wellbeing; Business Conduct and Ethics; Human Rights, and Personal Data.
Section 172 Statement
Details of how the Directors have had regard to the matters set out in Section 172 (1)(a) to (f) of the Companies
Act 2006 are provided in the Section 172 (1) Statement on pages 90 to 92. Further details can be found
throughout the Strategic and Corporate Governance Reports.
The Strategic Report on pages 1 to 78 is approved by the Board of Directors and signed on its behalf by:
Amanda Miller
Group General Counsel and Company Secretary
4 March 2026
Non-Financial and Sustainability Information Statement
Serco Group plc | Annual Report and Accounts 2025 | 78
80 Chair’s Corporate
GovernanceOverview
82 Our Governance Framework
83 Board of Directors
86 Group Executive Committee
87 Board leadership and
Company Purpose
89 Stakeholder engagement
90 Section 172 (1) Statement
93 Composition, succession
andevaluation
94 Nomination Committee Report
97 Audit Committee Report
103 Risk Committee Report
104 Corporate Responsibility
Committee Report
105 Directors’ Remuneration Report
127 Directors’ Report:
OtherInformation
134 Directors’ Responsibility
Statement
UK Corporate Governance Code 2024 (theCode)
During 2025, the Company complied with all of the provisions of the
Code available to view on the Financial Reporting Council (FRC)
website. Details on how we have applied the principles and
complied with the provisions in this Annual Report are set out below:
Page
Board leadership and Company Purpose
A Board effectiveness and activities 88–93
B Purpose, culture and values 2–3, 12–17, 87
C Board decisions and outcomes 88–92
D Shareholder and stakeholder engagement 34–65, 89–92
E Workforce policies and practices 37–44, 55–58, 89, 131
Division of Responsibilities
F Board roles 83–85, 87–88
G Independence 83–85, 94–96
H Time commitment and conflicts of interest 81, 88, 94–96, 127–128
I Board resources 88
Composition, succession and evaluation
J Board appointments and succession planning 83–85, 94–96, 132
K Board composition and skills
81, 83–85, 93–96
L Board performance review 93
Audit, Risk and Internal Control
M Audit effectiveness 97–102
N Fair, balanced and understandable assessment 99, 134
O Risk management and internal control 66–75, 87–88, 97–104
Remuneration
P Remuneration policies and practices 105–126
Q Directors’ remuneration 105–126
R 2025 performance outcomes 105–108, 110–119
Serco Group plc | Annual Report and Accounts 2025 | 79
Corporate
Governance
This report provides an overview
of how the Board operates for the
benefit of shareholders and other
stakeholders and sets out the
focus areas and key decisions
made by theBoard and its
Committees during the year.
Keith Williams
Chair
Dear Shareholders
As I begin my tenure as Chair of the Board, I am pleased
to present my first Corporate Governance Report for
Serco. I would like to thank my predecessor, John
Rishton, for his leadership and stewardship of the Board
and for ensuring a smooth and orderly transition. The
Board recognises the value of having strong corporate
governance at the centre of our decision-making. This is
how we generate long-term sustainable value for all our
stakeholders, including shareholders, colleagues,
customers, suppliers and partners, communities and the
society in which we operate. Since my appointment,
Ihave met with a number of our investors to gain an
understanding of their views, as well as undertaking
contract visits and meeting Sercocolleagues.
Board changes and composition
In addition to John’s retirement from the Board on
31December 2025, Mark Irwin retired as Group Chief
Executive on 28 February 2025, succeeded by Anthony
Kirby, and Nigel Crossley will be retiring as Group CFO
on 5 March 2026, succeeded by Mark Reid on 6 March
2026. In light of the tenure of our longer serving
Non-Executive Directors (NEDs) and recent Board
changes, the Nomination Committee and I have
reviewed the Board’s composition and skills in line with
the Group’s strategy and the current and future
opportunities and challenges we face. We are in the
process of searching for new NEDs to further strengthen
the breadth of skills, experience and diversity around the
Board table, and to support the Group’s long-term
strategic priorities.
Effectiveness
This year, we undertook an internal Board and Committee
performance review, the results of which demonstrate
that the Board as a whole continues to be effective with
agood mix of skills, experience, backgrounds and
diversity. We have agreed on a set of actions to
strengthen how we operate for the future (see page 93).
I would like to thank my fellow Board members and the
Executive Committee (ExCo) for their warm welcome
and efforts this year.
Keith Williams
Chair
4March 2026
Chair’s Corporate Governance Overview
Serco Group plc | Annual Report and Accounts 2025 | 80
Directors’ tenure as at 4March 2026
2025 Board and Committees scheduled meetings:
attendance
Director
Board
Audit
Corporate
Responsibility
Nomination
Remuneration
Risk
Keith Williams
1
4/4 n/a n/a 1/1 n/a n/a
Kirsty Bashforth
8/8 n/a 4/4 4/4 4/4 4/4
Nigel Crossley
8/8 n/a n/a n/a n/a n/a
Kru Desai
8/8 5/5 4/4 4/4 n/a n/a
Ian El-Mokadem
8/8 5/5 n/a 4/4 n/a 4/4
Victoria Hull
8/8 n/a n/a 4/4 4/4 n/a
Anthony Kirby
2
7/7 n/a 3/3 n/a n/a n/a
Tim Lodge
8/8 5/5 n/a 4/4 4/4 4/4
Sue Owen
8/8 n/a 4/4 4/4 n/a 4/4
Lynne Peacock
3
8/8 4/5
3
n/a 4/4 1/1 n/a
Former Directors
John Rishton
4
8/8 n/a n/a 4/4 4/4 n/a
Mark Irwin
5
1/1 n/a 1/1 n/a n/a n/a
Skills on the Board as at 4 March 2026
Skills Very limited Limited Moderate Substantial Very substantial
Leadership of complex global groups
Previous and/or current public listed company experience
Strategy and M&A of complex global groups
Financial expertise including banking, financing and audit
Working with governments
Outsourcing contracting
People and culture
HR & remuneration in international businesses
Management and oversight of group health and safety
Technology, digital and cybersecurity
Risk management, ethics and compliance
Environmental
Social and community matters
Chair’s Corporate Governance Overview continued
Serco Group plc | Annual Report and Accounts 2025 | 81
1. Keith joined the Board as Chair Designate from 1 August 2025. This reflects the meetings he was required to attend.
2. Anthony joined the Board on 1 March 2025. This reflects the meetings he was required to attend.
3. Lynne stepped down as Chair and a member of the Remuneration Committee at the conclusion of the 2025 AGM. This reflects the meetings she was required
to attend. She sent her apologies for the Audit Committee meeting in October due to a pre-existing commitment.
4. John retired from the Board and as a member of the Remuneration Committee on 31December 2025. He was required to attend all meetings during the year.
5. Mark retired from the Board on 28 February 2025. This reflects the meetings he was required to attend.
For further information on each Director’s skills and experience, see their biographies on pages 83 to 85.
Board of Directors
Responsible for the stewardship of the Group, overseeing its conduct and affairs to deliver on our strategic objectives
andcreating long-term success to generate sustainable value for our shareholders and taking into account the interests
ofother stakeholders.
The Board has established certain Committees to assist it in discharging its responsibilities and has delegated day-to-day
responsibilities to the ExCo.
Audit
Committee
Corporate
Responsibility
Committee
Nomination
Committee
Remuneration
Committee
Risk
Committee
Oversight of matters
relating to financial
reporting and
internal financial
controls, the
effectiveness of the
Internal Audit
function and the
External Auditor.
Oversight of
sustainability, social
and community
initiatives, ensuring
that the Company’s
responsible business
practices are aligned
with strategy and
stakeholder
expectations.
Reviews the Board
and Committee
structure and
composition to
ensure it has the
right balance of
skills,experience,
independence and
diversity, and is
responsible for
Board appointments
and oversight of
succession planning.
Determines the
remuneration
framework for the
Executive Directors,
senior management
and the Chair, having
regard to the wider
workforce
remuneration and
the Directors’
Remuneration Policy.
Oversight of the
effectiveness of
theGroup’s risk
management
framework and
internal controls,
including in-depth
reviews of specific
risks and ensuring
that risks are
appropriately
identified, managed
and mitigated.
Read the
Committee’s
Report on
pages97 to 102.
Read the
Committee’s
Report on
page104.
Read the
Committee’s
Report on
pages94 to 96.
Read the
Committee’s
Reporton
pages105 to 126.
Read the
Committee’s
Report on
page103.
Approval and Allotments
Committee
Group Executive
Committee (ExCo)
Investment
Committee
Disclosure
Committee
Acts on behalf of the
Board between scheduled
meetings to approve
matters delegated to it
bythe Board, including
thefinal approval of
documentation to
shareholders in relation to
half-year and full-year
reporting and employee
share schemes.
Responsible for execution
of strategy and day-to-day
management of the
business operations.
Monitors and approves
bids, mergers,
acquisitions and disposals
and other corporate
activity within specific
authority limits delegated
to it by the Board
andExCo.
Oversight of the
Company’s obligations
relating to the UK Market
Abuse Regulation.
Board Committees Management Committees
Our Governance Framework
Serco Group plc | Annual Report and Accounts 2025 | 82
The Matters Reserved for the Board and terms of reference for each of the Committees are available on our website.
Board leadership and Company Purpose: pages 87 to 89.
The Board comprises the
Non-Executive Chair,
seven independent
NEDsand two
ExecutiveDirectors.
Roles
The roles of Chair and Group
Chief Executive are distinct
and held by different people,
with a clear division of
responsibilities.
The Chair, who was
independent on his
appointment, leads and
isresponsible for the
operation of the Board.
Board changes
• Anthony Kirby joined the
Board and became Group
Chief Executive on 1 March
2025. He succeeded Mark
Irwin, who retired from the
Board as Group Chief
Executive on 28February
2025.
• Keith Williams joined the
Board as Chair Designate
on 1 August 2025 and
became Board Chair on
1January 2026.
• John Rishton retired from
the Board and as Chair on
31 December 2025.
• Nigel Crossley will retire
from the Board and as
Group CFO on 5 March
2026. He will be succeeded
by Mark Reid, who will join
the Board as Group CFO
on 6 March 2026.
Key to Committee membership
Audit Committee
Corporate Responsibility
Committee
Nomination Committee
Remuneration Committee
Risk Committee
Committee Chair
Board of Directors
Serco Group plc | Annual Report and Accounts 2025 | 83
Anthony Kirby
Group Chief Executive
Appointment to the Board
1 March 2025
Skills and experience
Anthony became Group
Chief Executive in March
2025. Having joined the
Group in 2017, he has
served as Chief Executive
Officer for UK & Europe,
Group Chief Operating
Officer and Chief People
Officer. He has over 20
years’ experience in
transformation, HSE and
corporate services across a
number of countries.
Prior to Serco, he held
leadership roles at
Compass Group plc,
including as Director of
Group Labour Strategy,
Group Workforce &
Organisation Director
andHR Director for Europe
and Japan.
Current external
commitments
• Non-Executive Director of
Haysplc.
Keith Williams CBE
Chair
Appointment to the Board
1 August 2025 (Chair since
1January 2026)
Skills and experience
Keith brings extensive
leadership and listed board
experience from a range of
industries, with over 40
years’ business experience
gained in a variety of
companies, including
nearly 20 years in chief
executive, chief financial
officer and chair roles.
He was previously Chief
Executive and Executive
Chair of British Airways plc
and the Non-Executive
Chair of International
Distribution Services
Limited (previously trading
as Royal Mail Group). Other
prior non-executive roles
include Director and
Deputy Chair of John Lewis
plc and Non-Executive
Director of Aviva plc.
Hehas also chaired the
Williams Rail Review
established by the UK
Government.
Current external
commitments
• Chair of Halfords Group
plc.
N C
A
C
N
Re
Ri
Nigel Crossley
Group Chief Financial
Officer (Group CFO)
Appointment to the Board
21 April 2021
Skills and experience
Nigel has over 30 years’
experience in finance
rolesin international
organisations.
He joined the Group in
2014 and became Group
CFO in 2021 having
previously held various
roles in the Finance team.
Prior to this, Nigel was
Director of Finance and
Transformation at EMI and
Group Financial Controller
of RHM plc, as well as
having undertaken various
roles at Procter & Gamble.
Current external
commitments
None.
Board of Directors continued
Serco Group plc | Annual Report and Accounts 2025 | 84
Kirsty Bashforth
Independent
Non-Executive Director
Appointment to the Board
15 September 2017
Skills and experience
Kirsty is an experienced
board director and
committee chair with
particular expertise
intransformation, change
management and
organisational culture.
Her previous board roles
include GEMS Education,
Kier Group plc, Diaverum
AB and Leeds Beckett
University. More recently,
she was Chair of Northern
Superchargers Limited. Her
executive career has been
international across private
equity, listed and family-
owned companies,
including 24 years at bp
plc, where she was the
Group Head of
Organisational
Effectiveness.
Current external
commitments
• Chief People and Culture
Officer of Delinian
Trading Limited.
• Non-Executive Director
for Employee Voice and
Chair of the
Remuneration Committee
of PZ Cussons plc.
• Director of QuayFive
Limited.
C N
Re Ri
Kru Desai
Independent
Non-Executive Director
Appointment to the Board
21 October 2021
Skills and experience
Kru has over 30 years’
experience of working in
the public and private
sector in leading
transformation of public
services in the UK and
internationally, with general
management and board
leadership roles in sales
and operational delivery.
She was previously a
Partner and a Non-
Executive Director and
Chair of the Remuneration
Committee of KPMG LLP
(UK). Prior to this, she was
an Executive Director and
member of the Group
Management Board of
Mouchel Group plc and
Hedra plc, as well as
Managing Director of Atos
(UK). Other prior roles have
included Independent
Commissioner of the
Geospatial Commission,
Chair of the Zinc Network
and Vice Chair of City St
George's, University of
London (formerly City,
University of London).
Current external
commitments
• Independent Non-
Executive Director of
Buro Happold Limited.
A C
N
Victoria Hull
Independent
Non-Executive Director
Appointment to the Board
1 September 2024
Skills and experience
Victoria has extensive senior
executive experience
across a broad range of
business, legal, commercial
and governance matters, as
well as strong international
experience.
She has previously held the
role of Senior Independent
Director at Ultra Electronics
plc. She was also Senior
Independent Director and
Chair of the Nomination
and Governance
Committee at Network
International Holdings plc.
Her executive experience
includes being an
Executive Director and
General Counsel of
Invensys plc and Telewest
Communications plc.
Current external
commitments
• Chair of Hikma
Pharmaceuticals plc.
• Non-Executive Director
and Chair of the
Remuneration Committee
ofIMI plc.
• Non-Executive Director
and Chair of the
Remuneration Committee
of IQE plc.
Re N Re
Ian El-Mokadem
Independent
Non-Executive Director
Appointment to the Board
1 July 2017
Skills and experience
Ian is an experienced chief
executive and non-
executive director with
international experience in
driving organic growth,
business transformation
and acquisitions and
disposals across a broad
range of large service and
utility businesses. He has
held leadership roles in
both listed and private
equity backed businesses.
He was previously Chief
Executive Officer of RWS
Holdings plc, V. Group and
Exova Group plc. Prior to
this, he was Group
Managing Director, UK &
Ireland of Compass Group
plc and has held various
senior management
positions with Centrica plc
and Accenture.
Current external
commitments
• Senior Advisor at
Warburg Pincus LLC.
• Non-Executive Director of
United Utilities Group plc.
• Non-Executive Director of
Diploma PLC.
• Director of Roegate
Consulting Limited.
A N
Ri
Key to Committee membership
Audit Committee
Corporate Responsibility
Committee
Nomination Committee
Remuneration Committee
Risk Committee
Committee Chair
Board of Directors continued
Serco Group plc | Annual Report and Accounts 2025 | 85
Re Ri A N
A N C N
Ri
Dame Sue Owen DCB
Independent
Non-Executive Director
andDesignated
Non-Executive Director
forColleague Voice
Appointment to the Board
3 August 2020
Skills and experience
Dame Sue has significant
experience of government
and economic policy,
having held senior roles in
several government
departments, including as
the Permanent Secretary
for the Department for
Digital, Culture, Media and
Sport. She has held senior
posts in the Department for
International Development,
Foreign Office, HM
Treasury and the
Department for Work and
Pensions, where she also
acted as the Diversity and
Inclusion Champion.
Current external
commitments
• Chair of the UK Debt
Management Office
Advisory Board.
• Supervisory Board
member of DAF NV.
• Non-Executive Director
ofPool Reinsurance
Company Limited.
• Specialist Partner at Flint-
Global Advisory.
• Non-Executive Director of
Pantheon International plc.
• Non-Executive Director
ofMethera-Global
Communications.
• Chair of the Royal Ballet
Governors.
• Royal Automobile Club
Board member.
Lynne Peacock
Senior Independent
Non-Executive Director
Appointment to the Board
1 July 2017
Skills and experience
Lynne has over 30 years’
experience in a range
ofnon-executive and
executive positions,
including in chief executive
officer roles. She has a
strong background in
brand development,
mergers and acquisitions,
change management and
business transformation.
Lynne has held a range
ofnon-executive director
andcommittee chair
appointments with major
companies including
International Distribution
Services plc, the Royal
London Mutual Assurance
Society, Scottish Water and
Standard Life Aberdeen.
She was also the Senior
Independent Director at
TSB Bank plc and Senior
Independent Director and
Chair of the Remuneration
Committee at Nationwide
Building Society. Her
executive experience
includes being the Chief
Executive of Woolwich plc
and National Australia Bank
Limited’s UK businesses.
Current external
commitments
• Chair of the Royal
Mencap Society.
Tim Lodge
Independent
Non-Executive Director
Appointment to the Board
21 February 2021
Skills and experience
Tim has a strong finance
and accounting background
with over 30 years’
experience in senior
financial roles within
international organisations.
He has considerable
experience in leading
significant strategic and
operational transformation
and driving commercial
performance.
He was previously Non-
Executive Director and
Chair of the Audit
Committee of Aryzta AG
and Chair of the
Management Committee
of the Cordwainers Livery
Company. His executive
experience includes being
the Chief Financial Officer
at Tate & Lyle PLC and
COFCO International.
Current external
commitments
• Non-Executive Director
and Chair of the Audit
Committee of Howden
Joinery Group Plc.
• Non-Executive Director
and Chair of the Audit
Committee of SSP
Groupplc.
• Non-Executive Director
ofArco Limited.
• Director of An African
Canvas (UK) Limited.
• Trustee of Gambia School
Support.
A
C
N
Re
Ri
ExCo changes announced to take effect post 5 March 2026
Mark Reid will become Group CFO effective as of 6 March 2026, succeeding Nigel Crossley who retires on
5March 2026.
Fiona Walters will become Chief Executive Officer, UK & Europe effectiveas of 23 March 2026.
Group Executive Committee
Serco Group plc | Annual Report and Accounts 2025 | 86
Anthony Kirby
Group Chief Executive
Helen Shaw
Interim Chief Executive
Officer, UK & Europe
Andrew Head
Chief Executive Officer,
Asia Pacific
Gillian Duggan
Group Chief People and
Culture Officer
Amanda Miller
Group General Counsel and
Company Secretary
Nigel Crossley
Group CFO
Michael LaRouche
Chief Executive Officer,
North America
Tom Read
Group Chief Digital and
Technology Officer
Phil Malem
Chief Executive Officer,
Middle East
Full biographies of our ExCo can be found on our website.
The Group Chief Executive is supported by the
Group Executive Committee (ExCo), who are
responsible for executing strategy and day-to-day
management of the business.
The role of the Board
The Board has overall responsibility for establishing
theCompany’s Purpose, Values and behaviours, and
ensuring that effective leadership and resources are
available to meet agreed objectives and the Group’s
strategy. It maintains oversight of the Group’s
operations, performance, governance and compliance
with statutory and regulatory obligations. The Board is
mindful of the need to create value for shareholders and
ensure long-term sustainable success; in doing so, it
takes account of the wider interests of other stakeholders
including investors, colleagues, customers, suppliers
andpartners, and the communities and society in which
we operate.
The Board is responsible for establishing and
maintaining an effective risk management and internal
controls framework. As part of this, it is supported by the
Audit, Risk and Corporate Responsibility Committees.
The Audit Committee Report (pages 97 to 102) sets out
the details of the committee’s responsibility for ensuring
the integrity of the financial reporting process and
oversight of financial controls. The Risk Committee
monitors the effectiveness of the risk management and
internal controls framework and has carried out a robust
assessment of the emerging and principal risks facing
the Company (see the Risk Committee Report on
page103).
Further details about our principal risks and
uncertainties and how they are managed and
mitigated are set out on pages 66 to 75.
The Viability Statement, which explains how the Directors
have assessed the prospects of the Company and
concluded that they have a reasonable expectation that
the Group will be able to continue in operation and meet
its liabilities as they fall due over the period of their
assessment, is set out on pages 76 and 77.
Culture
Our culture supports the delivery of the Group’s strategy
and its long-term sustainable success, while generating
value for shareholders. Embedding our Values (Trust,
Care, Innovation and Pride), behavioural standards and
leadership expectations in how we operate, lead and
grow is a part of this.
The Board monitors and assesses culture through a
number of indicators and updates including:
• discussions with the Group Chief Executive;
• reports to the Audit and Corporate Responsibility
Committees on any concerns raised through our
Speak Up confidential reporting service;
• themes and insights from our employee engagement
survey, Viewpoint;
• direct feedback and insights from colleagues via
DameSue Owen, the designated non-executive
director for workforce engagement (the Designated
Non-Executive Director for Colleague Voice);
• deep dives on people and cultural matters including
ethics and integrity and health, safety and wellbeing
through the Corporate Responsibility Committee;
• monitoring and, as appropriate, approving workforce
policies and practices to ensure that they are
consistent with our Values and support the Company’s
long-term sustainable success and drive the right
behaviours; and
• visits to contracts and offices to meet our colleagues
firsthand.
Read more on our People and Culture strategy
andEthics and Integrity in the Impact report on
pages 37 to 44 and 55 to 58.
Board leadership and Company Purpose
Serco Group plc | Annual Report and Accounts 2025 | 87
Board meetings
Meetings held in 2025: 10 (including two ad hoc)
Scheduled meeting attendance: see page 81.
A number of key decisions and matters are
reserved to the Board – see Matters Reserved
for the Board available on our website.
Board and Committee members are provided with papers
in advance of each meeting via a secure electronic portal.
Directors are expected to attend all meetings of the Board
and any Committees of which they are a member unless
prevented by prior commitments, illness or a conflict of
interest. If a Director is unable to attend a meeting, they
usually give their comments to the Chair or the
Committee Chair for consideration at the meeting. Private
NED-only sessions are held at the end of Board meetings.
The Group General Counsel and Company Secretary
and/or her nominee attends all meetings and provides
governance advice, guidance and support to the Board,
its Committees and individual Directors as required.
Directors are also able to obtain independent
professional advice if needed.
Each of the Committee Chairs reports to the Board on
their respective Committee’s activities, and Committee
papers and minutes are available to all Directors unless
there is an actual or perceived conflict of interest. Cross-
Committee membership provides visibility and
awareness of relevant matters.
Activities of the Board during 2025
The Board is focused on using its time effectively and
efficiently to oversee the delivery of the Company’s
strategic objectives and to ensure its long-term sustainable
success. Other members of senior management and
subject matter experts are invited to attend meetings at
the discretion of the respective Chair. Key activities
during the year included:
• discussing the Group Chief Executive’s report at each
meeting, which focused on the Group’s overall
performance and operations; engagement with, and
the views of, our stakeholders; key business operations
and consideration of headwinds and macroeconomic
events facing the business, and our related response;
• discussing the Group CFO’s report at each meeting,
including a review of the current financial and trading
performance for the period against budget and
consensus, and the full-year outlook;
• approving the financial statements at full and half-
yearand pre-close statements, including
externalguidance;
• approval of the £50m share buyback programme in
August 2025 (see page 92);
• approval of the 2024 final and 2025 interim dividends;
• a dedicated strategy meeting where it considered the
Group’s strategy and long-term growth opportunities,
key challenges and risks to delivery of our key
priorities of Growth, Competitiveness and Operational
Excellence; and the macroeconomic and geopolitical
environment and the Group’s response;
• discussing new bids, rebids and extensions, including
how they support the strategy and any related approvals
within the Board’s reserved matters (see page 92);
• reviewing M&A opportunities, including the approval
of the acquisition of MT&S (see page 92);
• reviewing the effectiveness of the risk management and
internal controls framework in particular being updated
on the business’s readiness activities through our
Integrated Assurance Framework (IAF) programme in
relation to future reporting against Provision 29 of the
Code (applicable for the 2026 reporting year) via the
Risk Committee. The Board undertook deep dives in
relation to the Failure to Grow Profitably and Significant
Impact of Policy Change principal risks (see pages 70
and 71);
• updates on our share price performance relative to the
market, share register movement, investor relations
activities and engagement with shareholders and
related feedback;
• approval of the Going Concern and Viability Statements
on the recommendation of the Audit Committee;
• updates on any significant litigation;
• updates in relation to legal, regulatory and
governance changes;
• reviewing and approving the Annual Report on the
recommendation of the Audit Committee (see page 99)
and that, taken as a whole, it is fair, balanced and
understandable and contains the information necessary
for shareholders to assess the Group’s position,
performance, business model and strategy;
• reviewing the themes and actions from this year’s Board
and Committee performance review (see page 93);
• discussing the progress and delivery against our People
and Culture strategy and the results from the Viewpoint
employee engagement survey;
• discussing feedback from Board engagement
activities, for example with colleagues and customers
via contract visits; and
• approving the appointment of the new Chair, Group
Chief Executive and Group CFO (see pages 94 and 95).
Board leadership and Company Purpose continued
Serco Group plc | Annual Report and Accounts 2025 | 88
The Board regularly engages with its stakeholders
todevelop an understanding of key issues, which
underpins its decision-making. NEDs seek to increase
their knowledge of the operations of the Group’s
operations in a number of ways, including
meetingcolleagues and undertaking contract visits.
Workforce engagement
Dame Sue Owen, as the Designated Non-Executive
Director for Colleague Voice, updates the Board on
employee perspectives and issues. She is supported by
acolleague in HR who has responsibility for Colleague
ConneXions, a platform enabling colleagues to have a
direct dialogue with Dame Sue. In addition, she regularly
undertakes visits to our operations to meet frontline
colleagues and during 2025, these included visits to our
sites at RAF Oakhanger and HMPAshfield.
Additional engagement and activities undertaken by the
Board include:
• providing all colleagues with an opportunity to give
feedback directly to the Board through the Viewpoint
survey. The feedback is shared and discussed with
theBoard;
• engaging directly with senior leaders at Board and
Committee meetings and at the Board strategy
day;and
• a number of contract visits globally by the NEDs. In
addition, the Board met in the North of England for its
May 2025 Board and Committee meetings and used
the opportunity to spend time with the local
management team.
The Board keeps its workforce engagement mechanism
under review and no change is proposed for 2026.
Relations with shareholders
The Group Head of Investor Relations maintains regular,
open and transparent dialogue with institutional
investors and sell-side analysts. He has access to the
Group Chief Executive and Group CFO, who are
available for meetings with shareholders and frequently
attend industry conferences. They also meet with major
shareholders to discuss relevant developments in the
business at half and full-year post-results roadshows;
through a programme of investor meetings; and with our
debt investors, including lending banks and US private
placement noteholders. There is also consultation with
proxy advisers and ESG analysts, with relevant internal
subject matter experts attending meetings as
appropriate. The Chair, Committee Chairs and the
Senior Independent Director are also available to meet
with investors.
During the year, activities included:
• the Group Chief Executive and the Group CFO
hadmore than 100 meetings with investors;
• Keith Williams met with a number of our larger
shareholders ahead of his formal appointment
asChairand after; and
• the Chair of the Remuneration Committee consulted
with shareholders on remuneration matters.
The outcome of such engagement is shared to ensure
that the Board as a whole has a clear understanding of
the views ofshareholders. We value the input received
from shareholders, which helps us to shape our approach
to governance including remuneration decisions.
At our 2025 Annual General Meeting (AGM), having
received just over 20% of votes against the Directors’
Remuneration Report (DRR) (79.39% in favour), the
Company contacted the top 20 shareholders to
understand their views on the decisions outlined in the
DRR and the reasons why those who voted against took
that decision. The feedback received from shareholders
did not raise any material concerns (see page 109).
AGM
At our 2025 AGM, all proposed resolutions were
approved by shareholders. Our 2026 AGM will be
heldon 22 April 2026 at the offices of Clifford Chance,
10 Upper Bank Street, London E14 5JJ at 10:30am.
ThisAnnual Report and Notice of the AGMwill be made
available to shareholders shortly. Shareholders are
encouraged to participate in the AGM; all resolutions
willbe proposed and voted on by poll and the results
will be announced to the market and made available on
our website after the meeting.
Stakeholder engagement
Serco Group plc | Annual Report and Accounts 2025 | 89
The Directors have acted in the way that they
considered, in good faith, would be most likely to
promote the success of the Company for the benefit of
its members as a whole. In doing so they have had
regard, among other matters, to those matters set out in
Section 172 (1) (a–f) of the Companies Act 2006. The
Directors consider all stakeholders when making key
decisions, but recognise that not every decision will
result in the preferred outcome for each stakeholder.
The Board therefore seeks to balance the diverse and
sometimes conflicting priorities and interests of the
Group’s stakeholders, ensuring that decisions support
the long-term, sustainable success of the business
guided by our Purpose, Values and key priorities
(seepage 2).
While the Board will engage directly with stakeholders
on certain issues, stakeholder engagement will often
take place at Divisional level, with the Board receiving
regular updates on stakeholder views from the Executive
Directors and senior management.
The following describe some examples of how the Board
has considered Section 172 in its decision-making
during the year.
Section 172 factor Further information
(a) The likely consequences of any decision in the long term
The Board’s diverse set of skills, knowledge and experience assists in
making informed decisions, promoting the long-term success of the
Company while considering the needs of our stakeholders.
Strategic Report
• At a Glance: page 2
• Our Market: pages 10 and 11
• Our Strategy: pages 12 to 17
• KPIs: pages 18 and 19
Corporate Governance
• Chair’s Corporate Governance Statement: page 80
• Board leadership and Company Purpose: pages 87
to 89
(b) The interests of the Company’s employees
The Board has oversight of colleague health, wellbeing, safety, diversity,
talent development and the alignment of culture and strategy with our
Values through the work of the Corporate Responsibility Committee. The
Board also considers feedback received from colleagues through the
employee engagement survey, Viewpoint, and Dame Sue Owen, as the
Designated Non-Executive Director for Colleague Voice.
Strategic Report
• KPIs: pages 18 and 19
• Impact report: People: pages 37 to 44
Corporate Governance
• Board leadership and Company Purpose: pages 87
to 89
• Corporate Responsibility Committee Report: page 104
• Directors’ Report: other information: page 131
(c) The need to foster the Company’s business relationships
withsuppliers, customers and others
Regular operational updates are provided to the Board and its Committees
by senior management, including matters such as the management and
assessment of suppliers and customer engagement and feedback.
Directors also meet with customers during contract visits.
Strategic Report and Other Information
• Group and Divisional Reviews: pages 20 to 33
• KPIs: pages 18 and 19
• Impact report: pages 34 to 65, 238 to 243 and on
our website
• Risk Management and Principal Risks and
Uncertainties: pages 66 to 75
(d) The impact of the Company’s operations on the community
andtheenvironment
Directors meet with users of the services we provide on behalf of our
customers during contract visits. Senior management also provide regular
updates directly to the Board and through its Committees on ESG
matters, including environmental strategy.
Strategic Report and Other Information
• Impact report and Our Impact - Data Tables: pages
34 to 65, 238 to 243 and on our website
Corporate Governance
• Corporate Responsibility Committee Report: page 104
(e) The desirability of the Company maintaining a reputation
forhighstandards of business conduct
The Board and its Committees oversee the effectiveness of our risk
management systems, internal controls and assurance processes. Our
Values, Code of Conduct (mycode) and workforce policies define our
culture and behaviour, enabling our colleagues to build and sustain
theskills to meet the evolving expectations of customers, communities
and markets.
Strategic Report and Other Information
• Impact report and Our Impact - Data Tables: People
and Governance: pages 37 to 44, 55 to 59, 238 to
243 and on our website
• Risk Management and Principal Risks and
Uncertainties: pages 66 to 75
Corporate Governance
• Corporate Responsibility Committee Report: page 104
(f) The need to act fairly as between members of the Company
The Board considers feedback received from engagement with
shareholders, debt investors, analysts and proxy advisers throughout the
year. Members of the Board meet with a number of shareholders and
analysts during the year; and the AGM provides an additional opportunity
to communicate with private and institutional investors.
Strategic Report
• KPIs: pages 18 and 19
• Impact report: pages 34 to 59 and on our website
Corporate Governance
• Stakeholder engagement: Relations with investors:
page 89
Section 172 (1) Statement
Serco Group plc | Annual Report and Accounts 2025 | 90
Our stakeholders and link to the key priorities of Growth, Competitiveness and Operational Excellence:
Colleagues
Our colleagues are critical to achieving our mission of bringing together the right people,
the right technology and the right partners to deliver positive impact. We continue to
strengthen the link between workforce stability, safety and operational excellence to
build a culture where colleagues feel safe, supported and able to thrive.
Shareholders
Engagement with and receiving the support of our shareholders is a key factor in
achieving our strategic goals. We seek long-term relationships by maintaining regular,
open and transparent dialogue with our investors. We value the input received from our
shareholders and use feedback to shape our approach to governance.
Customers
Our ability to engage with existing and new government customers through
understanding and responding to their needs ensures our continued success. We aim to
deliver tangible outcomes that support safer operations, stronger engagement and more
consistent delivery for our customers.
Suppliers and partners
We aim to work with suppliers that share our ethical standards and commitment to being
a sustainable, secure and reputable business. We aim to be a valued and trusted public
service provider, delivering public services with integrity in all that we do.
Communities and society We actively support and promote a culture of delivering and giving for positive
outcomes,employing people from local communities, working with those who represent
the needs of the communities we serve in order to strengthen their social and economic
wellbeing and minimise our environmental impact.
Read more about our key priorities on page 13.
Section 172 (1) Statement continued
Serco Group plc | Annual Report and Accounts 2025 | 91
Acquisition: Northrop Grumman’s
Mission Training and Satellite
Ground Network Communications
Software business (MT&S)
See also:
• Our Strategy: pages 13 and14
• Announcements
(30January2025; 27May2025)
Colleagues,
shareholders and
customers
Leveraging our strong balance sheet to support sustainable,
profitable growth through M&A opportunities is an important part of
our strategy. We consider opportunities which would increase the
Group’s capabilities, market access or scale and thereby benefit our
shareholders in the long term. In line with this, the Board considered
and approved the acquisition of MT&S from Northrop Grumman.
The Board considered each of the stakeholder groups with specific
focus on colleagues, customers and shareholders.
This strategic acquisition of a technology-enabled US defence asset
opens up new markets in a high-growth, high-margin sector, building
on our existing capabilities in defence training and people services
and supporting Serco’s growth ambitions within the international
space sector. Adding advanced mission training services and satellite
ground network software to our portfolio deepens our engagement
with the US Department of War, supporting programmes across the
US Army, Space Force, Air Force, Navy and Combatant Commands,
with a team of around 900 skilled professionals.
The acquisition completed on 27 May 2025. Subsequently, this has
led to the business participating in a number of additional bids,
including the successful bid for the development of the next
generation of Royal Australian Navy sailors at HMAS Watsons Bay.
Contract bids
See also:
• Group and Divisional review
onpages 20 to 33
Colleagues,
shareholders,
customers,
communities and
society
In line with the Matters Reserved for the Board, bids of a certain
value are required to be considered and approved by the Board.
During 2025, the Board considered and approved the successful bid
submission for management of HMP Dovegate. As part of the
approval, the Board considered a number of factors and the impact
on our stakeholders, including our knowledge, experience and
capabilities in the sector, strategic growth ambitions, and the long-
term benefit to our shareholders.
Returning funds to shareholders:
Share buyback programme 2025
See also:
• Group and Divisional Review
onpage 22
• Share buyback announcement
(7August2025)
Shareholders The Board approved a £50m share buyback programme in August
2025, which would return surplus capital to shareholders in line with
the Group’s capital allocation model. As part of the decision, the
expectations of our shareholders were considered. The buyback
programme was completed on 3 December 2025 and all
repurchased shares have been cancelled. This increased net debt
and reduced the number of shares in issue which, in combination
with a reduction in the underlying tax rate for the year, has further
improved underlying EPS. This brings the total shareholder returns
via buybacks since 2021 to around £390m.
Principal Board decision
Stakeholders considered
in Boarddiscussions Section 172 considerations
Section 172 (1) Statement continued
Serco Group plc | Annual Report and Accounts 2025 | 92
Board and Committee performance review
In line with the Code, we annually undertake a formal
and rigorous review of the performance of the Board
and its Committees and Directors, which considers the
Board’s composition and effectiveness.
Building on last year’s externally facilitated review
undertaken by Gould Consulting (who are independent),
the Board conducted an internal review of its
effectiveness this year, led by the Chair and supported
by the Company Secretariat. The process involved the
completion of tailored questionnaires by the Board and
Committee members and attendees. Consideration was
also given to any open actions from the 2025 review.
The results were then discussed with the Board. Progress
with the agreed action plan for implementation in 2026
will be monitored by the Nomination Committee.
2025 review
Our 2025 Board and Committee performance review
found that the Board and all of its Committees remain
effective, with a good mix of skills, experience,
backgrounds and diversity. The Board has strong
relationships with Management and Directors are able
toconstructively challenge as required. The review
identified some areas for focus for 2026. This included:
• increased discussion time on strategy at Board
meetings in addition to the annual dedicated strategy
meeting;
• focusing on the search for new NEDs given the long-
standing tenure of some Directors, which includes
reviewing the skills, experience and knowledge
required inline with the current and future strategy of
thebusiness and balancing continuity given recent
Board changes; and
• reviewing the Governance Framework to ensure it
continues to be appropriate for the business.
Development and training
The Chair and the Group General Counsel and Company
Secretary keep the training and development needs of
Directors under review. Training is provided to the Board
on a range of governance and other matters at Board
and Committee meetings. Directors are updated as
required on developments in the environment in which
the business operates with internal subject matter
experts and leads and external advisers invited to
meetings to provide updates as necessary. During the
year, these briefings included updates on the
institutional investor guidelines, legal and regulatory
changes, sustainability and cybersecurity. Directors also
undertake contract visits to increase their awareness of
the Group’s operations (see page 89).
Induction
On appointment, Directors undertake a comprehensive
induction programme designed to give them a thorough
overview and understanding of the business. This is
tailored to take into account the Directors’ prior
experience, their responsibilities and, for each NED,
specific responsibilities relevant to their respective
committee memberships. The programme includes
meetings with the Chair, the Group Chief Executive,
other members of the Board, the ExCo and other senior
management. Directors also receive key information
including on our strategy, our Governance Framework,
recent financial performance, risk management and
internal controls systems, and ESG Framework. New
Directors are encouraged to visit our contract sites to
develop a firsthand understanding of the business.
Induction –
KeithWilliams
Keith joined the Board on 1 August 2025. He had
a number of induction meetings, including with
John Rishton (asthe incumbent Chair), the Group
Chief Executive, Group CFO, members of the
ExCo and the other NEDs, as well as other key
senior leaders. Furthermore, he has held
meetings with other stakeholders and a number
of ourlarger shareholders since his appointment.
Keithreceived induction materials to provide him
with an understanding of Serco,its strategy, its
financial performance and Governance
Framework and related Director duties. He has
also undertaken a number of contract visits in the
UK to gain a broader insightinto our operations
and the work of our frontline colleagues as well
as attending a colleague forum to hear views
from across the business.
I look forward to meeting more
of our international colleagues
in2026.
Keith Williams
Chair
Composition, succession and evaluation
Serco Group plc | Annual Report and Accounts 2025 | 93
Dear Shareholders
I am pleased to present the Committee’s report as its
recently appointed Chair. The Committee is responsible
for leading the process on the appointment of new
members to the Board and to ensure that plans are in
place for orderly succession to both the Board and
senior management as well as overseeing the
development of a diverse pipeline for succession.
Activities of the Committee during 2025
At meetings and over specifically convened dinners,
theCommittee’s key activities included a review of
Boardand Committees’ composition, Chair and
Executive succession and subsequent recommendation
to the Board for these appointments, areview of
Directors’ tenure, independence and time commitment
as part ofeach of their respective election/re-election
recommendations and a review of the Board Diversity
Policy and any changes thereto for Board approval as
well as monitoring progress.
Board composition
The Committee regularly reviews the skills, knowledge,
experience and diversity of the Board and its
Committees to ensure that it is collectively well-placed
tomeet the strategic objectives of the Company and
thechallenges and opportunities that are likely to arise.
As part of this the Board skills matrix is kept under review
(see page 81) and is used when considering future
appointments, helping to highlight areas where the
Board could benefit from additional expertise.
All appointments to the Board are made on the
recommendation of the Committee and are subject
toaformal, rigorous and transparent procedure.
Succession plans are also considered by the Committee.
Appointments and succession plans are based on merit
and objective criteria and, within this context, promote
diversity of gender, social and ethnic backgrounds, as
well as cognitive and personal strengths.
Succession and appointments
During the year, the focus of the Committee’s time
wason Chair and Executive succession.
Group Chief Executive succession
The Committee approved the promotion and
appointment of Anthony Kirby as Group Chief Executive
and Executive Director with effect from 1 March 2025,
evidencing the strength of the Company’s succession
planning at the senior management level. Having
reviewed Anthony’s experience throughout his time with
Serco as Group Chief Operating Officer and UK &
Europe Chief Executive Officer and considering the
external landscape, the Committee and the Board felt he
possessed the required skills and experience for the role.
Chair succession
As part of the process led by the Senior Independent
Director, Russell Reynolds Associates (who are
independent), were engaged to support with the search
for a new Chair. A detailed candidate brief was
produced and agreed by the Committee. A long list
ofcandidates was identified in line with this for the
Committee to consider and create a shortlist. Members
of the Committee met with shortlisted candidates,
assessing their alignment to the original brief. Selected
shortlisted candidates also met with the Executive
Directors. Feedback from all interviews was discussed
bythe Committee.
Nomination Committee Report
Serco Group plc | Annual Report and Accounts 2025 | 94
Keith Williams,
Nomination
CommitteeChair
In 2025, the Committee
hasfocused on Chair and
Executive succession.
Membership
Keith Williams
1
(Chair)
Kirsty Bashforth
Kru Desai
Ian El-Mokadem
Victoria Hull
Tim Lodge
Dame Sue Owen
Lynne Peacock
Former Committee members
John Rishton
1
Meetings held in 2025: 5 (4 scheduled and 1 ad hoc).
Scheduled meeting attendance: see page 81.
Committeeeffectiveness: see page 93.
Terms of reference on our website.
1. Keith joined the Committee on 1 August 2025 and became Chair
of the Committee on 1 January 2026. John stepped down from the
Committee as a member and Chair on 31 December 2025.
The Committee subsequently identified Keith Williams
asthe preferred candidate for Chair given his extensive
leadership in executive and non-executive roles across
anumber of listed companies from a range of industries.
Further to the Committee’s recommendation, the Board
appointed Keith as Chair Designate with effect from
1August 2025 and as Chair with effect from 1 January 2026.
Keith was judged to be independent on appointment.
Details of Keith Williams’ induction can be found
onpage93.
Group CFO succession
Egon Zehnder (who are independent) were engaged to
support with the search for a successor to the Group
CFO. A long list of candidates was identified. Members
of the Committee and the Group Chief Executive met
with shortlisted candidates ahead of recommending
Mark Reid as the preferred candidate to the Committee
and the Board for approval. Mark has proven experience
as an executive, leading large, international, complex
finance functions across a variety ofroles. Mark will join
the Board as the Group CFO from 6 March 2026.
Board tenure and independence
The Committee and the Board considered the
independence of each NED and concluded that each
NED remains independent in character and judgement
in line with the Code. Tenure is considered as part of this
as well as more generally for Board succession planning.
Details of current Directors’ tenure can be found
onpage 81.
Time commitment
The Board acknowledges the importance of Directors
having enough time to perform effectively. On accepting
their appointment, Directors must confirm they are able to
allocate sufficient time to discharge their responsibilities
effectively. NED letters of appointment provide for a
minimum of 30 days per annum, which include
attendance at Board and relevant Committee meetings
aswell as devoting sufficient time for related preparation
and participation in contract and office visits to
understand the business better. Before recommending
tothe Board the approval of the appointment of Keith
Williams as the Chair, the Committee considered his other
commitments and whether he would be able to allocate
sufficient time to the role. The Committee was
comfortable that his other commitments would not be
detrimental to his ability to perform his duties as Chair.
For all NEDs, after considering their external
commitments, the Committee concluded each
hassufficient time for their respective roles.
The Company has a policy which allows the Executive
Directors to accept directorships of other quoted
companies and to retain the fees paid, provided that
they have obtained the prior permission of the Board
Chair. In accordance with the Code, and to ensure
sufficient time is devoted to their executive role, no
Executive Director is permitted to take on more than
onenon-executive directorship in a FTSE company or
the chairmanship of such a company. Anthony Kirby
holds one other non-executive directorship on the
boardof Hays plc.
Election and re-election of Directors
The Committee considered, in respect of each Director,
their skills and experience, commitment and tenure as
part of the recommendation to the Board in relation to
the proposed Director election/re-election resolutions
atthe upcoming AGM. The Board believes that each
Director it has recommended to shareholders for
election or re-election at the 2026 AGM brings
considerable knowledge and wide-ranging skills and
experience to the Board, demonstrates commitment
andis effective in role and, in the case of the NEDs,
isindependent.
Details of current Directors’ skills and experience
isset out in the biographies on pages 83 to 85
withthe collective skills of the Board on page 81.
Nomination Committee Report continued
Serco Group plc | Annual Report and Accounts 2025 | 95
Board diversity
The Board Diversity Policy sets out objectives aligned with the FCA’s UK Listing Rules (UK LR), the FTSE Women
Leaders Review and the Parker Review. This Policy was reviewed during the year and progress monitored and is
considered as part of new Director searches. As at 31 December 2025, the Board met each of the targets under LR
6.6.6R (9) and our Board Diversity Policy. Given the recent Chair change, progress against our Board Diversity Policy
as at 4March 2026 is set out below:
Board Diversity Policy aim Current progress as at 4March 2026
At least 40% of the individuals on the Board are women Ahead of our target: 50% women on the Board
At least one of the following senior positions on the Board is held by a
woman: (a) the chair; (b) the chief executive; (c) the senior independent
director; or (d) the chief financial officer
Target met: Female Senior Independent Director
At least one individual on the Board is from a minority ethnicbackground Ahead of our target: Two Board members identifying
as being from an ethnic minority background
The Board Diversity Policy is available on our website.
As at 4March 2026, the below shows diversity for the Board and its Committees:
Board composition: gender Board composition: ethnicity
Committee composition: gender
The Board is committed to ensuring the development of gender and ethnic diversity within the senior management –
seepages 238 to 243. Our gender identity and ethnicity data in accordance with UK LR 6.6.6R is set out on page 132.
2026 priorities and focus
There are three Directors who will reach their nine-year tenure in 2026, namely Lynne Peacock, our Senior Independent
Director, Ian El-Mokadem, the Risk Committee Chair, and Kirsty Bashforth, the Corporate Responsibility Committee Chair.
Asearch process is under way recognising the need to balance continuity on the Board given the number of recent changes.
Given the changes to the ExCo in 2025, the Committee will also focus on the talent and succession pipeline in the year ahead.
Keith Williams
Nomination Committee Chair
4March 2026
Nomination Committee Report continued
Serco Group plc | Annual Report and Accounts 2025 | 96
50%
25%
37%
25%
50%
50%
75%
63%
75%
50%
Audit
Committee
Corporate
Responsibility
Committee
Nomination
Committee
Remuneration
Committee
Risk
Committee
White
1
8 (80%)
Minority ethnic 2 (20%)
Male Female
1. White is defined by the Office of
National Statistics Ethnic Group
Response Categories for England.
Male 5 (50%)
Female 5 (50%)
Dear Shareholders
I am pleased to present the Committee’s report for the
year ended 31 December 2025. The Committee
oversees matters relating to financial reporting and
internal financial controls, the effectiveness of the
Internal Audit function and the External Auditor.
Activities of the Committee during 2025
During the year, the Committee monitored and reviewed
a range of finance, accounting and control matters, and
oversaw the Group’s financial reporting process.
A joint meeting was also held with the Risk Committee,
which provided an update on the business’s readiness
activities through our IAF programme in relation to
reporting against Provision 29 of the Code which will apply
for the 2026 reporting year (see pages 68 and 103).
Further to the robust tender process undertaken by the
Committee during 2024, Ernst & Young LLP (EY) were
approved at the 2025 AGM to become our new External
Auditor for the year ended 31 December 2025, having
demonstrated a deep understanding of our operations
and industry (see 2024 Annual Report for further details).
The Committee has ensured that an effective transition
process was undertaken to enable an efficient and
effective audit for 2025. We are grateful to the previous
External Auditor KPMG for their support with this
process. New learnings during the transition have been
taken into consideration and the Committee will
undertake a review of EY during 2026 following the
completion of the 2025 audit to reap the benefit of a
fresh audit view.
The Committee also continued to oversee the execution
and findings of the 2025 Internal Audit Plan and the
performance and effectiveness of the Internal
Auditfunction.
2026 priorities and focus
The Committee will continue to focus on the critical
accounting judgements made; the effectiveness of the
Group’s financial controls and assurance programme,
including activities within its joint ventures due to their
scale; and the delivery and effectiveness of the Group’s
Internal Audit function.
Together with the Risk Committee, the Committee
willalso monitor and review the material controls,
particularly financial, reporting and compliance controls,
to support the controls effectiveness attestation that the
Board will make in accordance with Provision 29 of the
Code in the 2026 Annual Report.
Tim Lodge
Audit Committee Chair
4March 2026
Membership and attendees
The Committee comprises independent NEDs, who as
awhole bring strong international, service and public
sector expertise and experience which is highly relevant
to the Group. Tim Lodge has served as Chair of the
Committee since April 2021 and has recent and relevant
financial experience, as required by the Code.
The Group CFO and other members of the Board, the
Group General Counsel and Company Secretary, the
Group Head of Internal Audit, other senior management
and representatives of the External Auditor (EY and
KPMG as relevant), attended meetings as required.
TheCommittee at the end of its meeting held private
sessions without Management present with the Group
CFO, Group Head of Internal Audit or External Auditor.
The Committee Chair also met with Management
(including the Group Head of Internal Audit) and both
External Auditors (EY and KPMG as relevant) prior to
each meeting.
Read our Committee members’ biographies
onpages 83 to 85.
Audit, Risk and Internal Control
Audit Committee Report
Serco Group plc | Annual Report and Accounts 2025 | 97
Tim Lodge,
Audit Committee Chair
The Committee ensured that
aneffective External Auditor
transition and audit process
wasdelivered for 2025.
Membership
Tim Lodge (Chair)
Kru Desai
Ian El-Mokadem
Lynne Peacock
Meetings held in 2025: 6 (5 scheduled and 1 ad hoc)
and 1 joint Audit and Risk Committee meeting.
Scheduled meeting attendance: see page 81.
Committeeeffectiveness: see page 93.
Terms of reference on our website.
Committee responsibilities
The Committee supports the Board in fulfilling its
responsibilities, which includes overseeing the Group’s
financial reporting processes; reviewing, challenging
and approving significant accounting judgements
proposed by Management; assessing the way in which
Management ensures and monitors the adequacy of
financial and compliance controls; the appointment,
remuneration, independence and performance of the
Group’s External Auditor; and the independence and
performance of the Group’s Internal Audit function.
The FRC’s Audit Committees and the External Audit:
Minimum Standard became mandatory from 1 January
2025. The Committee currently discharges its
responsibilities in line with this standard, including the
confirmation that the Company complied with the audit
tender requirements and has assessed whether suitable
accounting policies have been adopted this year and
whether Management has made appropriate
judgements and estimates.
Activities of the Committee during 2025
The below summarises the activities covered by the
Committee during the year:
• Financial Statements: Reviewed and recommended
tothe Board it approve the Annual Report, Full-Year
Results and Half-Year Results, focusing on key financial
judgements, disclosures and advising on whether the
reports are fair, balanced and understandable.
• Going Concern and Viability Statements: Ensured the
Going Concern and Viability Statements accurately
reflected the Group’s risks and the assumptions used
were appropriate, and recommended both to the
Board for approval.
• Task Force on Climate-related Financial Disclosures
(TCFD): Reviewed the TCFD disclosures in the Annual
Report.
• Accounting updates: Received updates on accounting
developments, financial and climate reporting.
• Internal Audit: Reviewed the Internal Audit Charter,
Internal Annual Plan and internal audit findings,
ensuring that they were appropriately addressed.
• Financial controls: Assessed the effectiveness of the
Group’s financial controls and assurance programme,
including IT General Controls, and other assurance
matters.
• Finance Operating Model: Discussed proposals to
redefine the future Finance Operating Model, to drive
efficiency in processes and ways of working.
• Fraud matters: Reviewed any fraud-related issues,
including those raised through the Speak Up process.
Updated on the actions taken in response to the new
‘failure to prevent fraud’ offence under The Economic
Crime and Corporate Transparency Act 2023 (ECCTA),
which came into force on 1 September 2025.
• External Auditor: Ensured a successful transition of
theExternal Auditor by ensuring both Management
and EY were aligned on strategy and plans throughout
the year and that there were sufficient resources to
support the change. In addition, the Committee
reviewed EY’s independence and objectivity, approved
its audit fee and received regular updates on the
progress of the audit and EY’s view on the financial
judgements taken. The Committee also reviewed and
recommended the approval by the Board of the
management representation letter to the External
Auditor.
• Non-audit fees and independence: Reviewed non-
audit fees incurred with the External Auditor and
assessed its independence and objectivity.
• Tax strategy: Oversaw the Group’s tax strategy,
including uncertain tax positions, tax audits, historic
taxlosses and compliance with tax legislation.
• Treasury strategy: Reviewed and approved the
financing strategy and Treasury Policy.
• Serco Pension and Life Assurance Scheme (SPLAS):
Reviewed the controls and assurance around the
strategy to fully secure its liabilities in the insurance
market in the medium term. The latest triannual
valuation of SPLAS was completed on 4 July 2025.
Internal control environment
The Committee oversees and evaluates the effectiveness
of the Group’s internal financial control environment,
aswell as being informed of the overall Group control
environment, which comprises compliance and risk
management controls. It regularly receives updates on
internal controls and makes recommendations to the
Board based on its findings.
The Group has both a Financial Assurance function and
an Internal Audit function, both of which routinely
contribute to Committee meetings. The Committee
reviews Financial Assurance findings and provides
guidance to direct their work. Similarly, it receives
regular updates from Internal Audit and may invite
management teams from various functions, Divisions
and Business Units to discuss any Internal Audit report
findings and Management responses.
Audit, Risk and Internal Control continued
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Serco Group plc | Annual Report and Accounts 2025 | 98
Internal Audit
Internal Audit is an independent function which reports
to the Committee, and evaluates the Group's
governance, risk management and control activities.
Ithelps Management, the Committee and the Board
discharge their duties to maintain effective internal
controls and risk management, and protect the Group’s
assets and interests. The role and mandate of Internal
Audit is set out in the Internal Audit Charter, which is
reviewed and approved annually to ensure that it
remains appropriate to the needs of the Group.
In North America, a local Internal Audit team maintains
independence through reporting to the Serco Inc. Audit
Committee, chaired by the Group CFO. Internal Audit
also uses external providers for specialist skills such as
ITand cybersecurity.
The Internal Audit Plan is risk-based and approved by
the Committee. The Committee receives regular updates
on its execution, findings and Management’s responses.
In 2025, audits covered business controls, support
functions, change programmes, financial controls,
IToperations and data privacy.
The Committee also evaluates the performance and
effectiveness of the Internal Audit function through
periodic reporting and private sessions with the Group
Head of Internal Audit. An External Quality Assessment
(EQA) of the effectiveness of Internal Audit was undertaken
during the year, as required by the Institute of Internal
Auditors’ standards. Overall, the EQA noted that the
function was performing well. Key strengths identified
included leadership, stakeholder engagement and
perceived value of Internal Audit within the organisation.
The EQA also reported that the function operates with a
well-defined mandate and holds the business accountable
for agreed actions. A number of recommendations were
made in order to further enhance effectiveness, the
majority of which related to suggestions for continuous
improvement, building on Internal Audit’s established
strategy and associated objectives.
Financial controls and fraud matters
The Group aims to have a strong and well-monitored
control environment that minimises financial risk and, as
part of the Committee’s responsibilities, it reviews the
effectiveness of systems for internal financial control and
financial reporting. Where relevant, the Committee also
works with the Risk Committee to consider financial risk
management. The Committee monitored the financial
control risk during 2025 and the Committee believes
that, to the best of its knowledge, the financial control
framework and the monitoring of this framework has
worked effectively during the year.
During the year, the Committee was also updated on the
fraud and other financial cases categorised as high risk
which were reported under the Speak Up process.
Itworks with the Corporate Responsibility Committee
which has oversight over the Speak Up process as a
whole. The Committee was also updated on the actions
taken in preparation for the new corporate offence of
‘failure to prevent fraud’ under ECCTA.
Financial reporting
The Committee concluded that, in its opinion, the
information presented in each of the Annual Report
andHalf-Year Results, when taken as a whole, is fair,
balanced and understandable and contains the
information necessary for shareholders to assess the
Group’s position, performance, business model and
strategy. To arrive at this conclusion and to form a basis
upon which to make a recommendation to the Board,
the following was considered:
• the effectiveness of the controls and procedures
designed to ensure that the Annual Report complies
with all relevant legal and regulatory requirements;
• comprehensive reviews by different levels of
management, including subject matter experts as well
as by each Committee;
• the internal verification process led by the Financial
Assurance team; and
• the findings and opinions of the External Auditor.
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Serco Group plc | Annual Report and Accounts 2025 | 99
Significant accounting issues and areas of financial judgement
The significant accounting issues and areas of judgement considered by the Committee during the year, and how
these were addressed, are as follows:
Significant accounting issues and areas
offinancialjudgement How these were addressed by the Committee
Contract performance, including Onerous Contract Provisions (OCPs) and litigation
The measurement of OCPs is
underpinned by assumptions regarding
the future operational performance of a
contract and possibly the outcome of
commercial discussions, all of which may
involve significant judgement by
Management. The Committee considers
whether an OCP exists ateach reporting
period end. Divisional legal registers are
reviewed by Management and assessed
for provision and contingent liability
recognition. The Committee considers
the assessment performed by
Management on whether a provision or
contingent liability exists at each
reporting period.
The Committee considered the view formed by Management regarding each
individually material potential OCP, as well as the aggregate view, which includes
Management’s assessment of portfolio risk, and concluded they were reasonable. The
Committee also considered the view formed by Management regarding each material
litigation claim and concluded that they were reasonable. The Committee was
satisfied that the work undertaken by Management to monitor existing contracts and
identify contracts where a new OCP or provision may be required.
Goodwill impairment
The Group has goodwill arising from
acquisitions allocated across four
groups of CashGenerating Units
(GCGUs). TheCommittee evaluates
the recoverability of this goodwill
formally at the end of each financial
year and consider whether impairment
indicators exist at the half year.
The goodwill impairment test as at 31 December 2025 used anticipated cash flows,
discount rates and terminal values, which are key areas of judgement. The Committee
considered the discount rates and terminal values used in the review, noting that they
had been sourced by a third-party expert, and that the underlying cash flows were
consistent with those included in Board-approved forecasts.
The Committee reviewed the resulting disclosures proposed by Management,
particularly in respect of Asia Pacific, which has the lowest headroom, and found them
to be transparent, appropriate and in compliance with applicable financial reporting
requirements. The Committee concluded that the carrying value of goodwill could be
supported and that no impairment was required.
Deferred tax assets
The Group has deferred tax assets
recognised for deductible temporary
differences and unused tax losses to the
extent that it is probable that taxable
profits will be available against which
these items can be utilised.
The Committee acknowledges the adjustment of £17.3m to derecognise part of the
Australian deferred tax asset due to limiting the recognition to forecast future profits in
Australia within the Group’s five-year planning cycle. The Committee concluded that it
was appropriate and noted that Management will continue to reassess the recognition
of this deferred tax asset at each period end.
Acquired intangibles
The Group has recognised customer
relationships on the acquisition of MT&S.
The Committee reviewed Management’s assessment of the fair value of £89.3m for
customer relationships recognised on acquisition of MT&S, which was valued on a
consistent basis to previous acquisitions. The Committee also considered the
amortisation period of 10 years to be consistent with the Group’s accounting policy.
Defined Benefit Pension schemes
The Group’s defined benefit pension
schemes include a number of significant
estimates and judgements, principal
among which are the assumptions
underpinning the liabilities and the
valuation of assets without market
observable prices.
The Committee considered the process undertaken by Management to arrive at the
key assumptions underlying the valuation of defined benefit obligations as detailed in
note 29 of the Consolidated Financial Statements. The Committee is satisfied that the
assumptions used remain appropriate and balanced based on comparison to
observable benchmarks in the market and advice taken from independent actuaries.
The Committee has also reviewed the approach taken to value scheme assets. The
Committee is satisfied that the valuations included within these financial statements
are reasonable and reflect the best estimate of the schemes’ assets and liabilities, and
that the disclosures are appropriate.
Audit, Risk and Internal Control continued
Audit Committee Report continued
Serco Group plc | Annual Report and Accounts 2025 | 100
Viability and Going Concern
The Committee considered Management’s assessment
in respect of the Viability and Going Concern
Statements, focusing on the Group’s headroom within
itsfinancial covenants and available liquidity.
TheCommittee considered the likely severity of key
riskscrystallising over the period of assessment,
including potential reductions in forecast win rates
andprofit margins.
The Committee concluded that, despite severe scenarios
potentially pressuring the Group’s headroom, the Group
remains viable. Key assumptions are disclosed within the
Viability Statement on pages 76 and 77.
The Committee also agreed that the going concern basis
of accounting is appropriate, as disclosed within the
Going Concern statement on pages 157 and 157.
Bothstatements were approved by theBoard on the
recommendation of the Committee.
External Auditor
The Committee manages the relationship with the
Group’s External Auditor on behalf of the Board and
isresponsible for making recommendations on the
reappointment of the External Auditor, determining
theirindependence from the Group and Management,
and agreeing the scope and fee for the audit.
The Board, on the Committee’s recommendation,
recommends the reappointment of Ernst & Young LLP
asthe External Auditor by shareholders at the
2026AGM.
Oversight of external audit
In respect of the audit scope and materiality, the
Committee reviewed the audit strategy as presented by
EY and found it to be comprehensive and focused on
thekey risks within the Group. The Committee did not
require any further areas of focus to be considered
withrespect to key judgements and estimates. The
Committee continued to monitor the delivery of the
audit timetable, ensuring that issues were closed out
appropriately, efficiently and on a timely basis. The
Committee also reviewed and challenged reports from
the External Auditor through the year, which, in addition
to its risk assessments and audit plans, included audit
findings and Management responses. The Committee
and Chair held regular private sessions with EY (and
previously KPMG while in post) throughout the year
without Management.
The Independent Auditor’s Report to shareholders
is set out on pages 136 to 149.
Effectiveness and quality of external audit
The Committee usually evaluates the effectiveness of the
External Auditor annually, using feedback obtained from
Committee members and Management. Its performance
is assessed against a range of criteria including calibre of
the audit team, knowledge of the Group, and the quality
of planning, review, testing, feedback andreporting.
Due to the change in the External Auditor in 2025, the
Committee will undertake a full effectiveness review of
EY following the 2025 audit in 2026. The Committee has
monitored the effectiveness of EY during the transition.
Following a review of EY’s audit strategy, which was
presented at the October 2025 Committee meeting,
theCommittee was satisfied that the External Auditor
demonstrated appropriate qualifications and expertise,
remained independent of the Group, and had
appropriate focus on the key issues within the Group.
The External Auditor continued to challenge the level of
prudence adopted in contract judgements, which were
deemed to be balanced overall. However, those
judgements which were slightly cautious or optimistic
were highlighted to the Committee for consideration.
Nojudgements were reported to be outside the External
Auditor’s acceptablerange.
Transition to new External Auditor
As part of the external audit transition, EY covered
thebelow:
1. File reviews and shadowing: EY reviewed KPMG’s
2024 audit file. In addition, EY attended key meetings
for the 2024 audit cycle (audit close meetings,
AuditCommittee meetings) to develop an early
understanding of business and key judgements and
estimates reached in the prior year. EY also attended
Committee meetings during the transition from KPMG.
2. Contract scoping: The EY Group team instructed
component teams to perform a scoping assessment
over revenue contracts considering criteria such as
size of contract, contracts in a breakeven/loss-making
position, significant changes in performance,
contracts which have an associated onerous contract
provision, contracts with complex KPI arrangements
or contracts with material claims or uncertainties. This
assessment was performed by each local component
team in scope for revenue testing and reviewed by
the EY Group team in the UK.
Audit, Risk and Internal Control continued
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Serco Group plc | Annual Report and Accounts 2025 | 101
3. Contract review meetings: EY held meetings with
contract managers outside of finance management
for a selection of key contracts across the Group,
based on size or risk.
4. Site visits: EY performed site visits for a selection
ofkey contracts on a risk basis to gain operational
insight into contract performance to support audit
procedures on the reasonableness of revenue
recognition.
5. Divisional Performance Review: EY received the
Divisional Performance Review meeting packs to
further support understanding of the business,
including performance of key contracts, operational
and legal matters.
6. Walkthroughs: EY performed walkthroughs of
significant processes, systems and controls, including
assessing the design effectiveness of key controls
impacting areas of fraud and significant risk.
Independence and non-audit services
The Group’s policy on the use of EY to deliver non-audit
services has been designed to comply in full with the
requirements of the FRC’s Revised Ethical Standard 2024
(Ethical Standard). The Committee limits the non-audit
work undertaken by the External Auditor, approving only
those which are required either by law or regulation, or
due to contractual requirements. In limited circumstances,
the use of the External Auditor may be permitted where
it is materially more efficient for them to be engaged, as
opposed to another third party, due to the work
completed in relation to the audit, provided it is
permitted by the Ethical Standard.
The policy also states that the Committee has pre-
approved the Group CFO to have authority to
commission the External Auditor to undertake non-audit
work, in accordance with the policy, where there is a
specific project with a cost that does not exceed £20,000.
The Committee regularly reviews the nature of non-audit
work performed by the External Auditor and the volume
of that work. Focus is given to ensuring that engagement
for non-audit services does not: (i) create a conflict of
interest; (ii) place the External Auditor in a position to
audit their own work; (iii) result in the External Auditor
acting as a manager or employee; or (iv) put the External
Auditor in the role of advocate for the Group. The
Committee also considers the independence
confirmation received from the External Auditor which
outlines the permissible non-audit services delivered, the
safeguards put in place and any other matters related to
wider compliance with the Ethical Standard such as
employment and rotation requirements. The Committee
is satisfied that there were no non-audit services or other
matters which prejudiced the independence or
objectivity of EY.
For the financial year ended 31 December 2025, the
non-audit fees paid to EY were £79,500, including joint
ventures (2024: £6,000 payable to the previous External
Auditor, KPMG) excluding the Half-Year review. The non-
audit services relate to agreed upon procedures in
respect of compliance reporting. The fee for the Half-
Year review, which is designated an audit-related
assurance service was £400,000 (2024: £612,000
payable to the previous External Auditor, KPMG).
2025 is the first year that EY is the External Auditor of
Serco Group plc. EY previously audited Merseyrail
Electrics 2002 Limited, a 100% subsidiary of Merseyrail
Services Holding Company Limited, who are a 50% joint
venture subsidiary of the Group. In accordance with
independence rules, the Merseyrail audit partner may be
involved in theaudit for a maximum period of 10 years,
with appropriate safeguards being applied after seven
years. Toallow for a further year on the audit for 2025,
appropriate safeguards were applied to reduce any
threats to an acceptable level.
An analysis of fees paid in respect of audit and
non-audit services provided by the External
Auditor for the past two years (2025: EY, 2024:
KPMG) is disclosed on page183.
Audit, Risk and Internal Control continued
Audit Committee Report continued
Serco Group plc | Annual Report and Accounts 2025 | 102
Dear Shareholders
I am pleased to present the Committee’s report.
TheCommittee advises the Board on the Group’s
overallrisk appetite, tolerance and mitigation strategy,
taking account of the current and prospective social,
geopolitical andfinancial environments.
Activities of the Committee during 2025
A key focus of the Committee is to oversee the
effectiveness of the Group’s risk management and
internal controls framework. Throughout the year, the
Committee has continued to review the Group’s risk
profile on a quarterly basis with focused in-depth reviews
in relation to the following principal risks: Significant
Failure of the Supply Chain; Contract Non-Compliance,
Non-Performance or Misreporting; Major Information
Security Breach; and Material Legal and Regulatory
Compliance Failure. The other principal risks are
reviewed by the Audit Committee, Corporate
Responsibility Committee or the Board.
Following consideration of internal and emerging risks
and themes, which included ESG, climate change, political
volatility and geopolitical instability, the Committee
approved amendments to the principal risk profile:
• Creation of anew principal risk: Significant Impact of
Policy Change to recognise the threats and uncertainties
associated with macroeconomic, political and
geopolitical uncertainty and the impacts these may
have on our current and future portfolios and pipeline.
• Amended a principal risk: refocused the Strategic
Technology risk to focuson the impact of AI and
disruptive technology resulting in the Impact of
Emerging or Disruptive Technology principal risk.
• Amended a principal risk: re-merged the Contract
Performance risk back into the Contract Non-
Compliance and Misreporting risk driven by the
acknowledgment that there issignificant overlap
between the controls between the two risks when
theywere standalone creating the Contract Non-
Compliance, Non-Performance or Misreporting risk.
We have also continued to receive updates from each
Division on the operation of our risk management
processes, including alignment of their top Divisional
risks to the principal risks and progress against our
annual Compliance Assurance testing programme.
A recurring item for the Committee has been the
monitoring of the business’ readiness activities through
our Integrated Assurance Framework (IAF) programme
in relation to reporting against Provision 29 of the Code
which will apply for the 2026 reporting year. This has
been a standing agenda item at every Committee
meeting in 2025 and the focus of a joint Audit and Risk
Committee meeting. Under the IAF programme we have
defined our approach to identifying our material controls
and have completed walkthroughs and initial substantive
testing of these controls. This work is ongoing and has
helped bring the new requirements to life. It has also
highlighted areas where enhancements to our control
environment can bemade and also the breadth and
depth of existing assurance mechanisms that we can
look to rely on as part of the Board’s future attestation.
In addition, the Group Director of Risk and Assurance and
each Divisional Head of Compliance held private sessions
with the Committee, providing an opportunity for any
concerns or issues to be raised without Management.
An external quality assessment of the Enterprise Risk
Management function was undertaken in 2025 and
identified some suggestions for continuous
improvement; these will reviewed by Management
andthe Committee for implementation in 2026.
2026 priorities and focus
The Committee will continue to review our emerging
and principal risks, and in readiness for the Provision 29
controls attestation, will implement the learnings and
actions from the 2025 pilot programme into our 2026
risk and assurance processes.
Ian El-Mokadem
Risk Committee Chair
4March 2026
Audit, Risk and Internal Control continued
Risk Committee Report
Serco Group plc | Annual Report and Accounts 2025 | 103
Ian El-Mokadem
Risk Committee Chair
Heightened geopolitical instability
has reinforced the need for robust
and effective risk management.
Membership
Ian El-Mokadem (Chair)
Kirsty Bashforth
Tim Lodge
Dame Sue Owen
Meetings held in 2025: 4 and 1 joint Audit and Risk
Committee meeting.
Scheduled meeting attendance: see page 81.
Committeeeffectiveness: see page 93.
Terms of reference on our website.
Read more about ourrisk management processes and
principal risks and uncertainties on pages 66 to 75.
Dear Shareholders
I am pleased to present the Committee’s report.
TheCommittee advises the Board on environmental,
social and ethical matters, oversees sustainability and
community initiatives, and ensures that the Company’s
responsible business practices are aligned with strategy
and stakeholder expectations.
Activities of the Committee during 2025
The Committee spent its time getting both a Group-wide
strategic position in areas within its responsibility as well
as an understanding of the performance and challenges
at a Divisional-level through deep dives with Divisional
representatives. Key activities included:
• discussions at each meeting of the progress,
performance and measures of our health, safety and
wellbeing strategy with specific focus on the approach
around root causes and leading indicators as well as
tracking the progress of outcomes. We have been
particularly focused on the 50% LTIs reduction by 2026
vs a 2023 baseline ambition, the maturing area of
psychological health and mental wellbeing as well as
physical security and resilience, with a spotlight on the
highest risk areas to test assurance of the strategy and
processes at the most challenging nodes;
• discussion on the delivery of the Ethics and Integrity
strategy during 2025 and the focus for 2026, reviewing
matters raised and any emerging themes via the Speak
Up process and how the Company conducts its
business policies and practices, as well as the
recommendation of the Modern Slavery and Human
Trafficking Statement to the Board for approval;
• reviewing the principal risks of Health, Safety and
Wellbeing and Failure to Act with Integrity, which
included discussions on any emerging risks and
mitigation activities;
• reviewing the implementation of the overall
programme of work around the ESG strategy, in
particular discussing our environmental impact and
our approach to the CTP, endorsement of the
refreshed DMA and relevant reporting requirements
including the TCFD statement and being updated on
our sustainable procurement activity. The Committee
also received updates on the evolving legal and
regulatory reporting landscape in this area including
awider Board training session on the risks and
opportunities from climate change; and
• discussions on colleague diversity, inclusivity and
belonging with a Divisional deep dive as well as insights
from the Designated Non-Executive Director for Colleague
Voice as part of her ongoing colleague interactions.
The Committee held private sessions with the Divisional
Heads of Ethics and Compliance, providing an opportunity
for any concerns or issues to be raised without Management.
2026 priorities and focus
The Committee will continue to have oversight of the
health, safety and wellbeing strategy, monitoring progress
against agreed deliverables and measures and the root
causes and leading indicators of risk, including the
increasing challenges of physical security. It will continue to
oversee implementation of the Ethics and Integrity strategy
with a spotlight focus into the resource, engagement and
training to support its resilience in the frontline; and as
part of overseeing the ESG strategy, time will be spent
discussingthe differentiated nature of social impact in the
community. We will also continue to hear first-hand from the
Divisions and sectors, how the People and Culture strategy
shapes the colleague ecosystem, experience and wider
culture across Serco to underpin delivery of the strategy.
Kirsty Bashforth
Corporate Responsibility Committee Chair
4March 2026
Corporate Responsibility Committee Report
Serco Group plc | Annual Report and Accounts 2025 | 104
Further information, see the Impact report
on pages 34 to 65.
Kirsty Bashforth
Corporate Responsibility
Committee Chair
Committee time has been spent
understanding the colleague
ecosystem, experience and
cultureacross Serco that
underpins strategy.
Membership
Kirsty Bashforth (Chair)
Kru Desai
Anthony Kirby
1
Dame Sue Owen
Former Committee members
Mark Irwin
1
Meetings held in 2025: 4
Scheduled meeting attendance: see page 81.
Committeeeffectiveness: see page 93.
Terms of reference on our website.
1. Anthony joined the Committee on 1 March 2025 and Mark
stepped down from the Committee on 28 February 2025.
Dear Shareholders
I am pleased to present the Directors’ Remuneration
Report (DRR) for Serco Group plc for the year ended
31December 2025. I assumed the role of Remuneration
Committee Chair following the 2025 AGM and would like
to thank my predecessor, Lynne Peacock, for her
leadership and support during the transition. I look
forward to continuing the Committee’s work to ensure
Serco’s remuneration framework remains fair, transparent
and closely aligned with Serco’s strategic priorities.
In this DRR we set out how our Directors’ Remuneration
Policy (the Policy) has been implemented in 2025, and
how we will apply the Policy for 2026.
2025 – a year of strong performance
As set out in the rest of this Annual Report, 2025 was a
year of strong performance for Serco, with the Company
delivering robust financial and operational outcomes
through a focus on improving productivity, efficiency and
margin performance. Revenue grew to £4.9bn and
underlying operating profit was £272m, delivering a
margin of 5.6% in line with our medium-term target range
of 5–6%, free cash flow was £219m and order intake was
strong at £5.5bn, with a book-to-bill ratio of 114%. We also
returned £93.6m to our shareholders, including the share
buyback of £50m in 2025.
Alongside strong financial performance, Lost Time
Incidents (LTIs) reduced by 22%, voluntary attrition
reduced from 21.2% to 18.6% and engagement
scoreswere maintained.
Context of remuneration decisions
The Committee continues to consider and value the
viewsand experience of all stakeholders when making
remuneration decisions. In particular, we remain cognisant
of the wider economic context and the relative experience
of many in society, and within the Serco workforce.
2025 performance-linked variable pay
In considering the variable pay outcomes for 2025,
theCommittee seeks to ensure that all payments are
appropriate against the backdrop of the overall
performance of the Company, the experience ofall
stakeholders and the context of the wider economic
environment. Where appropriate, assurances were
sought from the Audit, Risk and Corporate Responsibility
Committees, whose advice informed the decisions taken.
Consistent with historic practice, the Committee
considered the impact of material transactions during the
year to ensure that the targets for outstanding incentive
plans remain appropriate, to ensure consistency,
transparency and fairness. In line with our agreed
principles, adjustments are made that impact the targets
both negatively and positively to maintain the
performance stretch required for payouts as originally
intended. Adjustments have therefore been made, where
appropriate, to the performance targets for the 2025
annual bonus and the unvested LTIP awards to take into
account the MT&S acquisition and the Hong Kong
divestment which both completed in 2025 and these
adjustments have been reviewed by the Chair of the
Audit Committee. Details of theadjustments made to the
2025 bonus and unvested LTIP performance targets are
included on page 111 and 114 respectively.
Directors’ Remuneration Report
Serco Group plc | Annual Report and Accounts 2025 | 105
Victoria Hull
Remuneration
CommitteeChair
In this Report we set out how our
Remuneration Policy has been
implemented in 2025, andhow
wewill apply it for 2026.
Membership
Victoria Hull (Chair)
Kirsty Bashforth
Tim Lodge
Kru Desai
1
Former Committee members
John Rishton
1
Lynne Peacock
1
Meetings held in 2025: 6 (4 scheduled and 2 ad hoc).
Scheduled meeting attendance: see page 81.
Committeeeffectiveness: see page 93.
Terms of reference on our website.
1. Kru joined as a Committee member on 1 January 2026. Lynne
stepped down as Chair and a member of the Committee at the
conclusion of the2025 AGM andJohnstepped down from the
Committee on 31December 2025.
For payouts in respect of 2025, the application of our
adjustment principles increased the underlying operating
profit and order intake targets for the annual bonus and
had no impact on LTIP vesting levels as the maximum EPS
and ROIC targets had been exceeded.
2025 annual bonus
Taking into account the Company’s strong overall
performance in 2025, the performance against each
individual target set and the performance of each
Executive Director, it was determined that the 2025
bonus award will be 81.6% of maximum for the Group
Chief Executive and 80.9% of maximum for the Group
CFO. It was also determined that Mark Irwin, the former
Group Chief Executive, should receive a bonus award for
the period served as an Executive Director of the
Company to 28 February 2025 of £194,170. Further
details can be found on pages 111 to 113.
2023 LTIP
The Company’s performance has been consistently
strong over recent years, and this is reflected in the
performance outcomes against the three-year
performance targets set for the 2023 LTIP awards. The
Committee is satisfied that the vesting outcome of 94.1%
of the maximum opportunity appropriately reflects the
overall performance of the Company over this period.
Full details of the performance achieved, and vesting
outcome, can be found on pages 113 and 114.
We confirm that no malus and clawback provisions
wereexercised during the year.
Appointment of Mark Reid as Group CFO
On 17 December 2025, it was announced that Mark Reid
will join the Board as Group CFO on 6 March 2026
succeeding Nigel Crossley, who is retiring and will step
down from the Board on 5 March 2026 after 11 years
with the Company. The terms of Nigel’s retirement were
set out in the Section 430(2B) statement published on
our website. The details are also summarised on page
119 and full details will be provided in the 2026DRR.
The Committee approached the recruitment process
with the overarching objective of offering a package that
is sufficient to attract the right candidate, without paying
any more than is necessary. Mark’s salary was set at
£575,000 on appointment and he will be eligible for a
maximum annual bonus and LTIP opportunity for 2026 of
155% and 175% of salary, respectively, subject to time pro-
rating as appropriate. While there has been no change to
incentive levels, we recognise that Mark’s salary is higher
than his predecessor and we gave careful consideration
to the appropriate level of total remuneration, taking into
account the factors set out below.
During recruitment a number of candidates were
considered from public, private and private equity
backgrounds, and through this process the Committee
gained valuable insight into the level of remuneration
that would be required to attract an individual of the
right calibre. Mark has prior experience as Group CFO of
a listed company, joining us from Proximus, the Belgium
telecoms business listed on the Euronext Stock
Exchange. He has been with Proximus for nearly five
years and during that period he has also held the role of
interim CEO of their international division whilst retaining
Group CFO responsibilities. Mark has over 20 years’ of
international finance experience and previously held
senior roles at Liberty Global, Virgin Media, British
Airways and Yahoo Inc.
While our decisions are not solely driven by market data,
it was another input that fed into the decision. The
primary peer group used by the Committee is the FTSE
76 -175 with Serco positioned around the mid-point
against this group on a market capitalisation basis and
upper quartile on revenue, reflecting the complexity of
our business. Mark’s total remuneration on appointment
positions him just below median against the primary peer
group which the Committee deems appropriate given
his prior experience as Group CFO of a listed company.
A secondary peer group was also used which includes
UK-based data for listed and unlisted companies
operating in similar industries to Serco. This is particularly
relevant as we are acutely aware that these are the
companies that we realistically compete for talent with as
we have found through this and other recent recruitment
processes. Mark’s total remuneration is positioned
between lower quartile and median against this secondary
peer group. While we have taken a staggered approach
to setting pay on appointment in the past, we do not
think it is appropriate in this case given Mark’s significant
and valuable experience and the resulting moderate
positioning against the market data. Mark will be
ineligible for consideration for a salary review until 2027
and, ordinarily, any future increases will be broadly in line
with the average increases for our UK-based Group roles
within Serco which take into account the approach for
our wider employee base.
Full details of Mark’s remuneration arrangements
are set out on page 119, including details of his
buyout awards.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 106
This DRR has been prepared in accordance with the requirements of the Companies
Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended) (the Regulations). The DRR also meets the
relevant requirements of the Listing Rules of the Financial Conduct Authority and
describes how the Board has complied with the principles and provisions of the
Code relating to remuneration matters.
Implementation of the Policy in 2026
Review of base salary for Group Chief Executive
The Committee reviewed the base salary for the Group
Chief Executive and determined that Anthony should
receive an increase of 2.75% in 2026, aligned with the
UK-based Group roles and lower than the average
increase of 3.0% budgeted for the wider UK workforce.
2026 annual bonus
To drive greater focus on the growth opportunity through
enhanced productivity and operational excellence, the
Committee has decided to change the performance
measures applicable to the 2026 bonus for Executive
Directors, by increasing the weightings for both order
intake and free cash flow and removing the personal
performance element. Further detail of the 2026 annual
bonus can be found on page 120.
2026 LTIP
The performance framework for the 2026 LTIP will
followthe framework applied in 2025, with measures to
reflect theCompany’s focus on longer-term sustainable
growth. Full details of the performance measures and
targets for the 2026 LTIP can be found on page 121.
Stakeholder engagement
We are cognisant that the vote at the 2025 AGM was
lower than historically and therefore wrote to our major
shareholders and proxy agencies to provide them with
an opportunity to feedback on our decisions as well as
our proposed implementation for 2026. We were
pleased with the support received and thank those who
took the time to consider and respond with their
feedback on the implementation of our Policy for 2025
and its proposed implementation for 2026.
In addition to direct engagement with shareholders, our
Investor Relations team is also in regular contact with our
shareholders and shares any feedback or queries on
remuneration throughout the year so that we can
maintain an ongoing dialogue.
The Board regularly engages with Serco’s workforce
through a number of channels, receiving feedback on
general pay and conditions, and invites comment on
remuneration matters from all colleagues. Further detail
can be found on page 89.
The Committee will continue to consider all feedback
provided by shareholders and other stakeholders when
taking remuneration decisions and ensure that the
rationale for the decisions taken is clearly outlined in
therelevant DRR.
Looking ahead
In 2026, we will carry out a thorough review of the
Directors’ Remuneration Policy ahead of the triennial
shareholder vote on policy at our 2027 AGM. We are
committed to ensuring the Policy supports the business
in attracting and retaining the talent needed over the
long term to deliver critical services to governments and
strong shareholder returns, impacting a better future for
us all. This will be at the forefront of our review as we look
to ensure reward for Executive Directors, as well as across
the workforce, is fit-for-purpose and future-proof.
In the meantime, and on behalf of the Committee, I wish
to thank all our shareholders for their ongoing support.
We’re confident that the Policy decisions implemented in
2025, and our proposals for 2026, will continue to ensure
that the Executive Directors are fairly rewarded for
delivery against the strategic goals of the Company,
withdue consideration given to overall Company
performance and risk management.
I hope you will support the resolution to vote in favour
ofthis Report at the forthcoming AGM.
Victoria Hull
Remuneration Committee Chair
4March 2026
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 107
Single figure remuneration at a glance (£m)
Fixed pay from 1 April 2026
Implementation of Remuneration Policy for 2026
Remuneration in 2026 will align to the approved 2023 Remuneration Policy as set out in the 2023 Annual Report.
94.1% of maximum
Anthony Kirby
£868,238
2.75% increase on 2025
Mark Reid
2
£575,000
UK wider workforce
3.0%
average increase on 2025
Variable pay aligned to business strategy
Annual bonus
Bonus awards in excess of 100% of salary are subject
tomandatory deferral into shares for three years.
LTIP
On vesting, shares received (after payment of tax) are
subject to a further post-vest holding period until the
fifth anniversary of grant.
Malus and clawback provisions apply to the deferred bonus and LTIP share awards during the three-year period prior to
vesting and within five years of grant respectively. Clawback provisions apply to the annual bonus.
Alignment with shareholders
In employment Minimum shareholding of 200% of salary.
Post-employment 200% of salary for first year post-employment, or actual shareholding at termination if lower;
100%ofsalary for second year post-employment, or 50% of shareholding at termination if lower.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 108
Mark Irwin
1
Group Chief Executive
(until 28 Feb 2025)
1. Anthony Kirby was appointed to the Board as Group Chief Executive on 1 March 2025, succeeding Mark Irwin who stepped down on 28 February 2025.
Anthony’s 2023 LTIP award, granted for his prior role at Serco, is excluded from the figures above as it was not awarded in respect of qualifying services.
2. Mark Reid will be appointed to the Board as Group CFO on 6 March 2026, succeeding Nigel Crossley who will step down on 5 March 2026. The salary
reported above will apply from the date of his appointment.
Underlying operating profit 40%
Free cash flow 25%
Order intake 20%
Employee safety 10%
n
Employee retention 5%
% of base salary Anthony Kirby Mark Reid
Maximum 175% 155%
On-target 87.5% 77.5%
Aggregate EPS 25%
Average ROIC 25%
Relative TSR 20%
Book-to-bill 10%
n
Organic revenue growth 10%
n
Employee engagement 5%
n
Environmental impact 5%
% of base salary Anthony Kirby Mark Reid
Maximum 200% 175%
On-target 122.5% 107.2%
Base salary Pension allowance Taxable benefits Bonus LTIP
£1.98m
£1.86m
£2.62m
2025 Executive remuneration at a glance
2023 LTIP
vesting outcome
Anthony Kirby
1
Group Chief Executive
(from 1 Mar 2025)
Nigel Crossley
Group Chief Financial
Officer
2025 annual
bonus outcome
78.6%
of maximum
81.6%
of maximum
80.9%
of maximum
£0.0m £0.5m £1.0m £1.5m £2.0m £2.5m £3.0m
Committee overview and activities
Membership and role of Committee
The Committee consists of independent NEDs and is responsible for recommending a fair and responsible
remuneration framework that aligns the Executive management team to shareholders’ interests and rewards and
incentivises them appropriately for their contribution to Group performance. The Committee’s primary focus is to
ensure a clear link between reward and performance, ensuring that the Policy, structure and levels of remuneration
for the Executive Directors and other senior executives reinforce the strategic aims of the business, reflects the market
context in which Serco operates and the reward strategy throughout the rest of the business.
The Committee’s composition and operations comply with the Code, Listing Rules and the Companies Act 2006.
Summary of the Committee’s activities during 2025
The Committee met six times in 2025, including two ad-hoc meetings. Meetings are attended by Executive
management and independent remuneration advisers, Willis Towers Watson (WTW), with no individual present for
discussion relating to their own remuneration. The table below summarises the key issues considered by the
Committee in 2025:
Meeting Key agenda items
January (ad hoc) Consideration of remuneration arrangements for new Group Chief Executive and remuneration
arrangements for outgoing Group Chief Executive
February 2024 annual bonus payouts for Executive Directors and Executive Committee members; 2022 LTIP vesting
outcome; 2025 bonus and LTIP frameworks; 2025 discretionary share awards; shareholder consultation
update; and wider workforce remuneration framework
June 2025 AGM voting outcomes; remuneration arrangements for new Board Chair; remuneration arrangements
in relation to Executive Committee changes; and remuneration outcomes for wider workforce
September 2026 bonus and LTIP frameworks; Executive Director benchmarking; remuneration arrangements in
relation to Executive Committee changes; discretionary share awards; and UK Gender Pay Gap analysis
November (ad hoc) Consideration of remuneration arrangements for new Group CFO and outgoing Group CFO
December Interim performance update for 2025 bonus and 2023 LTIP; consideration of adjustments to reflect
M&Aactivity; performance targets for 2026 bonus and LTIP; and overview of wider workforce
remuneration frameworks
External advisers
WTW provided advice to the Committee throughout the year. WTW is a member of the Remuneration Consultants’
Group and, as such, voluntarily operates under the Remuneration Consultants’ Group Code of Conduct. The
Committee is satisfied that WTW provides robust and professional advice. The fees paid to WTW in respect of 2025
(excluding VAT) are set out in the table:
Adviser Appointed by Services provided to the Committee
Fees for services provided
to the Committee
1
Other services provided to the Company
2
WTW
Remuneration
Committee in 2020
Advice on market practice;
governance; reward consultancy £69,900
Reward and benefits consultancy;
provision of benchmark data; DRR review
1. Fees are determined on a time spent basis.
2. WTW does not have any other connection with individual Directors and the Committee is satisfied that the services of their advisers are independent.
Policy and DRR: Voting outcomes
Shareholder approval for the Policy and the 2024 DRR is set out below:
Resolution Year of AGM Votes for % Votes against % Total votes cast Votes withheld
1
Policy 2024 690,996,641 83.34% 138,123,003 16.66% 829,119,644 35,355
2024 DRR 2025 629,520,973 79.39% 163,427,440 20.61% 792,948,413 2,579,534
1. A ‘Vote Withheld’ is not a vote in law and is not counted in the calculation of the proportion of votes ‘For’ or ‘Against’ a Resolution.
The Policy, set out in the 2023 Annual Report, was approved by shareholders at the 2024 AGM. The 2024 DRR was
approved by 79.39% of shareholders at the 2025 AGM. In accordance with the requirements of the Code, the
Company conducted a period of consultation with the top 20 shareholders and published a statement on the
Company website setting out the views received from shareholders and the actions taken.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 109
Single total figure of remuneration – Executive Directors (audited)
The following table shows a single total figure of remuneration in respect of qualifying services provided in 2025 for
each Executive Director, together with comparative figures for 2024.
All figures in £
Mark Irwin
1
Anthony Kirby
2
Nigel Crossley
2025 2024 2025 2024 2025 2024
Salary 137,333 818,000 704,167 — 504,597 490,800
Taxable benefits
3
19,351 80,698 93,597 — 52,599 41,666
Pension
4
10,987 65,440 56,333 — 40,368 39,264
Total fixed remuneration 167,671 964,138 854,097 — 597,564 571,730
Bonus
5
194,170 1,289,820 1,005,880 — 636,820 685,450
LTIP
6,7
1,618,340 — N/A — 1,390,285 624,919
Total variable remuneration
8
1,812,510
1,289,820 1,005,880 — 2,027,105 1,310,369
Total
1,980,182
2,253,958 1,859,977 — 2,624,669 1,882,099
1. Mark was appointed as Group Chief Executive on 1 January 2023 and stepped down on 28 February 2025.
2. Anthony was appointed as Group Chief Executive on 1 March 2025.
3. The taxable benefits relate to the provision of independent financial advice and tax support, as appropriate; a car or car allowance (fully inclusive of all scheme
costs including insurance and maintenance), healthcare and private medical assessments, as well as taxable business expenses. Where Serco settles the
income tax and social security liability in respect of benefits provided, the value of the benefit has been grossed up at the individual’s marginal tax rate. The
taxable benefits for Anthony and Nigel includes £54,979 and £26,040 respectively in relation to accommodation expenses provided in the period.
4. The pension amounts comprise payments made in lieu of pension, calculated as a percentage of base salary, from which the Executive Directors make their
own pension arrangements.
5. The bonus amounts comprise the total bonus amount earned in respect of qualifying services in 2025, including any amounts deferred into the Equity Settled
Bonus Plan (ESBP).
6. The 2023 LTIP awards granted to Anthony in respect of his role previously held within Serco, for which the performance period ended in 2025, are excluded
from the figures above as they were not awarded in respect of qualifying services.
7. This is the estimated or actual value of LTIP awards for which the performance period ended in the year including dividend equivalents. The quantum
attributable to share price appreciation is £636,613 and £546,902 for Mark and Nigel respectively. The Committee believes that the share price movement
appropriately reflects the broader performance of the Company and, therefore, did not make any discretionary adjustments to the vesting of these awards.
Further details are provided on pages 113 and 114. The LTIP value reported for Nigel in respect of 2024 has been restated to reflect the actual share price at
the relevant vest date for the award (being his 2022 LTIP award, which vested on 6 April 2025: £1.529987).
8. Malus and clawback provisions, as set out in the Policy, apply to the relevant incentive awards, including the annual bonus and LTIP. These provisions were not
exercised during the reporting year.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 110
Annual Report on Remuneration
Variable pay outcome (audited)
2025 Annual bonus
In line with the Policy, the 2025 target and maximum annual bonus opportunities were 87.5% and 175% of salary
respectively for the Group Chief Executive and 77.5% and 155% of salary respectively for the Group CFO. The
achievement determined by the Committee against the financial and non-financial measures, together with the
overall bonus outcome for 2025, are summarised on page 111 to 113.
Performance targets and achievement against them
The following table sets out the performance targets for 2025 as well as achievement against these. As set out in
theCommittee Chair’s letter, and in line with historic practice, the Committee considered the impact of material
transactions during the year to ensure that the targets for outstanding incentive plans remain appropriate considering
the experience of all our stakeholders to ensure consistency, transparency and fairness. In line with the Committee’s
agreed adjustment principles, the underlying operating profit targets have been adjusted upwards to reflect the net
impact of the MT&S acquisition and the Hong Kong divestment which both completed in 2025. These adjustments
were reviewed in detail by the Chair of the Audit Committee. In addition, the order intake target has been adjusted
upwards to reflect the impact of the MT&S acquisition. While this results in an increase in the stretch of the targets,
this ensures that they achieve their original purpose and are no more or less difficult to achieve.
Performance measure and relative weighting
Threshold
target Target
Maximum
target
Actual
performance
Achievement
against measure
(% maximum
opportunity for
this measure)
Underlying operating profit
1
(40%) £263.5m £270.2m £291.8m £276.8m 65.3%
Free cash flow
1
(15%) £130.5m £133.8m £157.8m £219.0m 100.0%
Order intake
1
(15%) £5.00bn £5.25bn £5.50bn £5.54bn 100.0%
ESG scorecard (15%) 100.0%
LTI
2
472 460 407 370
Employee retention
3
21.2% 20.2% 19.2% 18.6%
Individual objectives (15%)
Mark Irwin (until 28 February 2025) 50%
Anthony Kirby (from 1 March 2025) 70%
Nigel Crossley 65%
Overall bonus (% max)
Mark Irwin (until 28 February 2025) 78.6%
Anthony Kirby (from 1 March 2025) 81.6%
Nigel Crossley 80.9%
1. Actual performance at constant currency.
2. LTIs are measured as the number of incidents recorded during the performance period.
3. Assessed against the 12-month rolling voluntary attrition rates across the Group for 2025.
Achievement of individual objectives
Executive Director Achievements in year
Mark Irwin,
GroupChiefExecutive
(until28 February 2025)
The Committee recognised Mark’s contribution during the first two months of 2025, prior to him
stepping down as Group Chief Executive.
Mark supported Anthony in his transition to Group Chief Executive, ensuring a smooth handover
ofresponsibilities.
Mark ensured the effective close out of 2024 year-end processes.
Achievement (%maximum
for thismeasure)
50%
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 111
Executive Director Achievements in year
Anthony Kirby,
GroupChiefExecutive
(from1 March 2025)
The Committee considered Anthony’s performance against his objectives and deemed his overall
performance in 2025 to be strong.
In taking up the Group Chief Executive role, Anthony has established strong and productive
relationships with the Board Chair and Board and external stakeholders, including key customers
around the world, as well as the investor community including the development of our shareholder
register, and delivered strong financial results. Anthony has demonstrated effective and visible
leadership throughout 2025, delivering strong financial performance, through an increased focus
onimproving productivity, efficiency, and margin performance across the Group, supported by
disciplined contract management and operational improvements. Anthony has also established a
strong foundation for the future through strategic decisions taken in relation to the Company
portfolio, growth in the pipeline and the establishment of a new strong Executive Committee team.
Key achievements include:
• Strong financial performance including delivering revenue of £4.9bn, with a return to organic
growth and underlying operating profit of £272m, delivering a margin of 5.6% — in line with our
medium-term target range of 5–6%;
• Increased focus on improving productivity, efficiency, and margin performance across the Group,
with underlying operating profit margin at the upper end of our target range of 5–6%, supported
by disciplined contract management and operational improvements;
• Significant improvement in employee safety, through a programme of initiatives, delivering 39%
reduction in LTIs;
• Growth in order intake to £5.5bn, with a book-to-bill ratio of 114%, and a record pipeline of £12.1bn;
• Strategic decisions taken in relation to the Company portfolio, including the acquisition and
integration of MT&S, the implementation of a joint venture with Mubadala and the sale of our
Hong Kong business;
• Establishment of a strong Executive Committee team, with the right skills, knowledge and
experience to lead the Company’s growth agenda. This included the recruitment of successors for
the Group CFO role and the CEO of UK & Europe role, as well as the appointment of successors
for the CEO of North America and Group General Counsel & Company Secretary roles who
successfully onboarded in 2025;
• Substantial growth in Serco’s share price, which rose by more than 80% in 2025, along with the
completion of a £50m share buyback.
Achievement (%maximum
for thismeasure)
70%
Executive Director Achievements in year
Nigel Crossley,
Group CFO
The Committee considered Nigel’s performance against his objectives and deemed his overall
performance in 2025 to be strong.
Key achievements include:
• Assisted the new Group Chief Executive with a smooth transition into the role, delivering a
successful 2025 year-end process;
• Continued to build a strong finance team fit for the future ensuring strong, ‘above brief’ finance
leaders in key finance roles;
• Managed our relationship with our key finance delivery partner Accenture, developing a plan
toon-shore resources in line with our organisation development plans;
• Commenced the strategic roadmap planning for finance technology upgrade for consideration
bythe Board;
• Successfully onboarded our new External Auditor, EY, ensuring the handover from our previous
External Auditor, KPMG, was successful and ensured no business interruptions;
• Supported the organisation’s plans for efficiency and productivity resulting in improvements in
on-contract performance;
• Substantial growth in Serco’s share price, which rose by more than 80% in 2025, along with the
completion of a £50m share buyback.
Achievement (%maximum
for thismeasure)
65%
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 112
2025 annual bonus outcome
The table below sets out the bonus amounts in respect of 2025 performance. The bonus payment to Mark Irwin in
thetable below is pro-rated to reflect his services as Group Chief Executive to 28 February 2025. The payment to
Anthony Kirby reflects the period since appointment on 1 March 2025:
Mark Irwin Anthony Kirby Nigel Crossley
Bonus amount earned £194,170 £1,005,880 £636,820
Bonus payable as % of max
(% salary)
78.6%
(137.6%)
81.6%
(142.8%)
80.9%
(125.4%)
Value of bonus to be deferred for three years into Serco shares
(% of total bonus)
1
n/a £160,880
(16.0%)
n/a
1. Mark stepped down as Group Chief Executive on 28 February 2025 and Nigel stepped down as Group CFO on 5 March 2026, with their respective bonuses
paid in cash at the end of March 2026.
In determining the bonus outcomes, the Committee considered Serco’s wider business performance, the experience
of all our stakeholders and the bonus outcomes for our wider employees. The Committee recognises the strong
performance of the Group in a challenging environment - profit in the year was supported by a number of contracts
either starting or moving to their operational phase as well as the contribution of MT&S. This largely offset the impact
from higher National Insurance contributions in the UK, increased corporate costs and the reduced activity levels in
Justice & Immigration. The resulting margin for the Group of 5.6% is well within our medium-term target range and
another year of strong free cash flow conversion meant the Group’s free cash flow of £219m was comfortably ahead
of guidance. After reviewing all factors, including the application of an underlying operating profit test to ensure
affordability, the Committee concluded that the formulaic outcome was fair and required no adjustment.
2023 LTIP awards
The 2023 LTIP awards which were granted to Executive Directors on 6 April 2023 will vest on 6 April 2026, subject
tothe Company’s achievement against the financial and non-financial targets set for the three-year period to
31December 2025. The performance and formulaic vesting outcome for each tranche of the 2023 LTIP is as follows:
Performance condition and relative weighting Threshold – 25% vesting Maximum – 100% Performance measured
Vesting
(% of maximum)
Relative TSR
1
(25%) Median ranking Upper quartile ranking Rank 23/107 100.0%
Aggregate EPS
2
(25%) 34.10p 41.68p 45.39p 100.0%
Average pre-tax ROIC
2
(25%) 17.6% 21.5% 24.5% 100.0%
Book-to-bill
3
(10%) n/a 105.0% 103.7% 87.0%
ESG scorecard
3
(15%) n/a See below See below 69.4%
Overall vesting outcome 94.1%
1. For the 2023 LTIP, the Company’s TSR performance was assessed relative to the constituents of the FTSE 250, excluding investment trusts, over the three-year
period ended 31 December 2025. The Company’s Total Shareholder Return (TSR) of 79.4% ranked 23/107, which is above upper quartile.
2. The EPS and ROIC targets have been adjusted by the Committee to reflect the impact of the MT&S acquisition in 2025. Further detail of the adjustments is set
out below, however it should be noted that the adjustments had no impact on the vesting outcome as the maximum targets had been exceeded.
3. The Committee considered the book-to-bill and ESG scorecard targets for 2023 to be strategically critical to the longer-term success of the Company and so
there should be no vesting for below-target performance for these elements; this is a more stringent approach than required under the Policy. These elements
vest at 50% for on-target performance, rising on a straight-line basis to 100% at maximum. All other performance measures vest at 25% for threshold
performance, rising on a straight-line basis to 100% at maximum, with no vesting below threshold.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 113
Adjustment to LTIP targets to reflect MT&S acquisition
To ensure that the performance targets for the in-flight LTIP awards continue to achieve their original purpose and
areno more or less difficult to achieve, the Committee determined that the EPS and ROIC targets should be adjusted
to reflect the impact of the MT&S acquisition completed in 2025, that was not anticipated when the original targets
were set. Given Serco’s capital base and starting ROIC, acquisitions can lower ROIC initially even when they strengthen
the business and create value for our shareholders. The use of basic EPS in our LTIP means that amortisation of
intangibles arising on acquisition can initially impact basic EPS negatively, while underlying EPS increases. It is
important that the incentives continue to drive the right behaviours and do not discourage transactions which create
shareholder value over the longer term.
This decision was guided by our adjustment principles to ensure consistency, transparency and fairness to
management and shareholders and is consistent with the approach taken by the Committee for previous material
transactions, such as the WBB acquisition in 2021, with a full review by the Chair of the Audit Committee. The
adjustments applied by the Committee to the EPS and ROIC targets for the in-flight LTIP awards to reflect the MT&S
acquisition are shown below:
Share awards Performance metric Original target range Adjusted target range Adjustment variance
2023 LTIP Aggregate EPS 34.64p – 42.34p 34.10p – 41.68p ‘-0.54p/-0.66p
Average ROIC 18.3% – 22.4% 17.6% – 21.5% ’-0.7%/-0.9%
2024 LTIP Aggregate EPS 43.39p – 53.03p 42.87p – 52.40p '-0.52p/-0.63p
Average ROIC 22.1% – 27.1% 20.2% – 24.7% ’-1.9%/-2.4%
2025 LTIP Aggregate EPS 46.92p – 57.35p 46.81p – 57.22p ‘-0.11pp/-0.13p
Average ROIC 24.9% – 30.5% 21.4% – 26.2% ’-3.5%/-4.3%
ESG scorecard performance for 2023 LTIP awards
After considering the Company’s progress across all components of the ESG scorecard over the three-year period,
the Committee determined an overall outcome for this element of 69.4% of maximum.
Scorecard component Actual performance
Average annual Group employee engagement score over the
three-year performance period (score of 70 for target, and 72
atmaximum).
Employee engagement: The three-year average engagement
score was 71.3, meeting the target threshold and demonstrating
continued positive sentiment.
Assessment against a scorecard of factors relating to the
improvement in colleague diversity, including progress on
activities which support diversity and review of quantitative
metrics such as the percentage of women and colleagues
ofdiverse ethnic backgrounds holding senior global
leadershiproles.
Colleague diversity: Senior leadership roles held by women
since first measured towards the end of 2023 rose slightly from
33.1% in June 2023 (when first measured) to 34.0% at the end of
2025, and those held by diverse ethnic backgrounds reached
9.8% at the end of 2025, reflecting steady progress in diversity
and inclusion efforts. Further details of progress in 2025 can be
found on page 42 of this Annual Report.
Improvement in our understanding, management, and
disclosure of Serco’s environmental risks.
Environmental progress: Our ESG performance continued to
improve, with a 32% reduction in Scope 1 and 2 carbon
emissions versus the (restated) 2022 baseline and progress in
renewable energy usage, supporting Serco’s long-term
sustainability commitments. We also achieved 100% renewable
sourced energy across all Divisions from the end of 2024, ahead
of planned schedule. Further details of progress can be found
on pages 49 to 54 of this Annual Report.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 114
Overall vesting outcome of 2023 LTIP Awards
The Committee reviewed Group performance over the full period and agreed that the vesting outcome of 94.1%
appropriately reflects the Company’s overall performance and strategic progress over the three-year period and that
no further adjustments are required. Based on this vesting outcome, the following awards will vest to the Executive
Directors under the 2023 LTIP plans:
Award vesting Number of shares vesting
1
Value vesting
2
Mark Irwin
3
2023 LTIP 639,812 £1,618,340
Nigel Crossley 2023 LTIP 549,650 £1,390,285
1. Shares vesting from the 2023 LTIP awards remain subject to a two-year post-vest holding requirement. The number of shares vesting includes both the original
LTIP award shares and dividend equivalent shares accrued over the performance period.
2. Based on the three-month (ended 31 December 2025) average closing share price of £2.5294.
3. The number of shares vesting for Mark is pro-rated to the date on which he stepped down on 28 February 2025.
Pensions (audited)
As at 31 December 2025, there were no Executive Directors actively participating or accruing additional entitlement
in the Serco Pension and Life Assurance Scheme, which is a defined benefits scheme.
Payments for loss of office (audited)
Mark Irwin stepped down as Group Chief Executive and as an Executive Director of Serco Group plc on 28 February 2025.
Mark’s service contract provides for a twelve-month notice period which commenced on 13 January 2025. After
stepping down from the Board, Mark transitioned into the role of Strategic Adviser to the Group. The table below
setsout payments for loss of office.
Description Details of payment
Salary and benefits • Base salary and normal benefits paid in line with the Policy and his contractual entitlement until cessation
of employment.
Discretionary annual
bonus award
• Entitled to receive a 2025 bonus, subject to performance, and time served in respect of his role as
Strategic Adviser.
• Not entitled to receive a 2026 bonus.
• Award remains subject to malus and clawback provisions.
ESBP for bonus
earned above 100%
of salary deferred
into shares and
vesting after three
years. These awards
are not subject to
further performance
conditions or pro-
rated.
1
• Treated as ‘good leaver’ in respect of outstanding ESBP awards unvested at the date he ceases
employment. The following awards will vest in full on the normal vesting dates:
– 2024 ESBP – 125,707 shares to be retained – vesting on 28 March 2027.
• The total number of shares linked to the award will be increased for any dividend equivalents
inconnection with dividends paid during the vesting period.
• Award remains subject to malus and clawback.
Holiday entitlement
• All outstanding holiday entitlement to be taken by the end of the notice period.
Share awards
1
• No awards to be made under the Company’s LTIP in 2025 or 2026.
• Treated as ‘good leaver’ for awards unvested at the end of the notice period (being awards made under
the 2023 and 2024 LTIP). Outstanding unvested LTIP share awards will vest on the normal vesting dates
subject to the satisfaction of the relevant performance conditions and on a time pro-rated basis to the
termination of employment. A two-year post-vesting holding period will continue to apply.
• 2023 LTIP – 955,855 shares to be retained – vesting date 6 April 2026 – holding period expires 6April 2028.
• 2024 LTIP – 512,656 shares to be retained – vesting date 8 April 2027 – holding period expires 8April 2029.
• The total number of shares linked to the awards will be increased for any dividend equivalents
inconnection with dividends paid during the vesting period.
• Awards remain subject to malus and clawback provisions.
1. The number of shares shown reflects the original share awards granted and excludes dividend equivalent shares.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 115
Nigel Crossley will step down as Group CFO and as an Executive Director of Serco Group plc on 5March 2026. Nigel’s
service contract provides for a 12 month notice period which commenced on 17 December 2025. After stepping
down from the Board, Nigel will continue to provide services to the Company through a transition period. The table
below sets out the remuneration payments Nigel is entitled to receive after stepping down as an Executive Director.
Salary and benefits • Base salary and normal benefits in line with the Policy and his contractual entitlement to the end of his
notice period.
Discretionary annual
bonus award
• As Group CFO for the whole of 2025, entitled to receive a 2025 bonus in full, subject to performance.
• Entitled to receive a 2026 bonus, subject to performance, pro-rated to reflect the period he provides
services to the Company in 2026.
• Awards remain subject to malus and clawback provisions.
ESBP for bonus earned
above 100% of salary
deferred into shares
and vesting after three
years. These awards
are not subject to
further performance
conditions or pro-
• Treated as ‘good leaver’ in respect of outstanding ESBP awards unvested at the date he ceases
employment. The following awards will vest in full on the normal vesting dates:
– 2024 ESBP – 37,662 shares vesting on 28 March 2027
– 2025 ESBP – 120,036 shares vesting on 28 March 2028
• The total number of shares linked to the award will be increased for any dividend equivalents
inconnection with dividends paid during the vesting period.
• Award remains subject to malus and clawback.
Holiday entitlement • All outstanding holiday entitlement to be taken by the end of the notice period.
Share awards
1
• No awards to be made under the Company’s LTIP in 2026.
• Treated as ‘good leaver’ for awards unvested at the end of the notice period (being awards made under
the 2024 and 2025 LTIP). Outstanding unvested LTIP share awards will vest on the normal vesting dates
subject to the satisfaction of the relevant performance conditions and on a time pro-rated basis to the
termination of employment. A two-year post-vesting holding period will continue to apply.
• 2024 LTIP – 410,124 shares to be retained – vesting date 8 April 2027 – holding period expires 8April 2029.
• 2025 LTIP – 306,417 shares to be retained – vesting date 7 April 2028 – holding period expires 7April 2030.
• The total number of shares linked to the awards will be increased for any dividend equivalents
inconnection with dividends paid during the vesting period.
• Awards remain subject to malus and clawback provisions.
Description Details of payment
1. The number of shares shown reflects the original share awards granted and excludes dividend equivalent shares.
Awards made in 2025
2025 ESBP (audited)
In line with the Policy, the portion of Nigel Crossley’s 2024 bonus above 100% of salary was deferred into an ESBP
conditional share award granted on 28 March 2025. The award will vest on 28 March 2028 and is subject to malus
and clawback, with no additional performance conditions.
Face value Market price at award
Directors (£)
1
Grant date (£)
2
Number of shares
3
Nigel Crossley 191,049 28 March 2025 1.5916 120,036
1. Calculated as the value of the Executive Directors’ 2024 bonus in excess of 100% of salary.
2. Average closing share price on the five trading days immediately prior to the date of grant.
3. Calculated using the average share price used to determine the number of shares awarded.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 116
2025 LTIP (audited)
In line with the Policy, the Group Chief Executive and Group CFO received LTIP awards in 2025 equal to 200% and
175% of salary respectively. Awards were granted as conditional shares and will vest on 6 April 2028, subject to
performance over the three-year period to 31 December 2027 and continued employment.
Directors
Basis of
award
(% salary)
Face
value
(£) Grant date
Market price
at award
(£)
1
Number
of shares
2
Percentage vesting
atthreshold
performance
3
Performance period
end date
Anthony Kirby 200% 1,690,000 7 April 2025 1.6118 1,048,517 22.5% 31 December 2027
Nigel Crossley 175% 888,992 7 April 2025 1.6118 551,552 22.5% 31 December 2027
1. Average closing share price on the five trading days immediately prior to the date of grant.
2. Calculated using the average share price used to determine the number of shares awarded.
3. 90% of the awards are subject to financial and ESG performance conditions that vest at 25% for threshold performance. 10% of the awards relate to book-to-bill
performance conditions that vest at 0% for threshold performance and only begin to vest when at least target performance is achieved.
The performance measures and targets for the 2025 LTIP awards, based on our longer-term business forecasts and
strategy and analyst consensus, are as follows:
Performance condition and relative weighting Threshold – 25% vesting Target – 50% vesting
7
Maximum – 100%
Aggregate EPS
1
(25%) 46.81p — 57.22p
Average pre-tax ROIC
2
(25%) 21.4% — 26.2%
Relative TSR
3
(20%) Median ranking — Upper quartile ranking
Book-to-bill
4,5
(10%) n/a 100% 105%
Organic revenue growth
(10%)
6
4% — 6%
Employee engagement
7
(5%) 71 — 73
Environmental impact
8
(5%) Reduction of 794 tCO
2
e — Reduction of 2,105 tCO
2
e
1. The EPS targets are based on basic EPS before exceptional items, adjusted to reflect tax paid on a cash basis, measured as an aggregate over the three-year
performance period. As outlined above, the EPS targets have been adjusted to reflect the impact of the MT&S acquisition in 2025.
2. The ROIC targets are based on pre-tax ROIC, measured as an aggregate over the three-year performance period. As outlined above, the ROIC targets have
been adjusted to reflect the impact of the MT&S acquisition in 2025.
3. The TSR targets are based on Serco’s ranking relative to companies in the FTSE 250 (excluding investment trusts), measured over the three-year performance.
4. The book-to-bill performance measure is based on the cumulative average book-to-bill ratio over the three-year performance period.
5. The Committee considers the book-to-bill target to be strategically critical to the longer-term success of the Company and so there should be no vesting for
below-target performance for this element; this is a more stringent approach than required under the Policy. This element vests at 50% for on-target
performance, rising on a straight-line basis to 100% at maximum. All other performance measures vest at 25% for threshold performance, rising on a straight-
line basis to 100% at maximum, with no vesting below threshold.
6. The organic revenue growth targets are measured as a three-point average over the three-year performance period.
7. The employee engagement targets are based on the average annual Group employee engagement score over the three-year performance period.
8. The environmental impact targets reflect the reduction in the annual Scope 1 and 2 carbon emissions achieved in 2028 vs 2025.
Vesting will take account of the Group’s underlying performance, along with input from the Audit and Risk
Committees and external market reference points, as appropriate, to ensure that outcomes are fair and appropriate.
All LTIP awards are subject to a post-vesting holding period to ensure a minimum five-year term, and are also subject
to malus and clawback.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 117
Single total figure of remuneration – NEDs (audited)
The remuneration for the NEDs consists of cash fees paid monthly with increments for positions of additional
responsibility. In addition, reasonable travel and related business expenses are paid. No bonuses are paid to NEDs.
NEDs’ fees are not performance related.
Fee-bearing Committee
roles held in the year
Board fee (including Chair fees)
(£)
Taxable benefits
1
(£)
Total
2
(£)
2025 2024 2025 2024 2025 2024
John Rishton
3
305,984 297,752 10,716 10,249 316,700 308,001
Kirsty Bashforth
83,986
81,696
9,277
4,899
93,264
86,595
Kru Desai
70,326
68,403
—
—
70,326
68,403
Ian El-Mokadem
78,522
76,379
—
409
78,522
76,788
Victoria Hull
4
69,023
19,398
—
—
69,023
19,398
Tim Lodge
83,986
81,696
—
1,081
83,986
82,777
Dame Sue Owen
5
75,790
73,720
—
—
75,790
73,720
Lynne Peacock (SID)
4
85,031
91,716
—
—
85,031
91,716
Keith Williams
3
24,917
—
—
—
24,917
—
Total
877,565
790,760
19,993
16,638
897,559
807,398
Audit Committee Corporate Responsibility Committee Remuneration Committee Risk Committee Denotes Chair
No fee is payable for being a member or Chair of the Nomination Committee.
1. Taxable benefits in 2024 and 2025 relate to reimbursed taxable travel and subsistence business expenses.
2. NEDs do not receive any variable pay so ‘Total’ is total fixed remuneration.
3. Keith was appointed to the Board on 1 August 2025 and succeeded John as Board Chair effective 1 January 2026. He received a NED fee only for the period
prior to his appointment as Chair.
4. Victoria joined the Board on 1 September 2024 and succeeded Lynne as Chair of the Remuneration Committee at the conclusion of the 2025 AGM. Lynne
stepped down as Chair and member of the Remuneration Committee at the conclusion of the 2025 AGM.
5. Dame Sue receives an additional fee as Designated Non-Executive Director for Colleague Voice.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 118
C Re Ri
A C
Re
A Re Ri
A Ri
C Ri
A Re
A C Re Ri
Detail of the salary increases, pension opportunity and annual bonus and LTIP awards (including a summary of the
performance measures and relative weightings) is provided on page 108.
Review of Executive Director base salaries
While the Committee decision making is not solely driven by market data, the Committee considers market data from
two peer groups when setting remuneration levels:
• A primary peer group includes UK listed companies of a similar financial size and complexity to Serco (FTSE 76–
175). Serco is currently positioned around the mid-point of this group on a market capitalisation basis, with a high
degree of complexity, a large workforce, an international reach and high levels of revenue positioned around the
upper quartile against the peer group.
• A secondary peer group of UK-based listed and unlisted companies operating in similar industries to Serco. This
peer group reflects the companies that we most often compete with for talent, which increasingly includes public,
private and private equity entities.
Group Chief Executive
Having reviewed the base salary for the Group Chief Executive, the Committee determined that Anthony should
receive an increase of 2.75% in 2026, aligned with the average for UK-based Group roles. This is lower than the
average increase of 3.0% budgeted for the wider workforce.
Group CFO
Mark Reid will join the Board as Group CFO on 6 March 2026 succeeding Nigel Crossley, who is retiring and will step
down from the Board on 5 March 2026 after 11 years with the Company. The terms of Nigel’s retirement were set out
in the Section 430(2B) statement published on our website and are also outlined on page 116.
When determining the remuneration package for the Group CFO role, the Committee considered a range of relevant
internal and external factors including the size, scope and complexity of the role, pay levels for the same role in
similar organisations and Mark’s significant experience as the Group CFO of Proximus, a large, international and
complex listed business. After careful consideration, the Committee determined that Mark should receive a base
salary of £575,000 per annum and be eligible for a maximum annual bonus and LTIP opportunity for 2026 of 155%
and 175% of salary, respectively, subject to time pro-rating as appropriate. The Committee recognises that Mark’s
salary is higher than that of his predecessor and feels this is necessary to attract, retain and motivative a candidate of
Mark’s calibre who will be instrumental in helping Serco deliver against our ambitious strategic goals. Mark will be
ineligible for consideration for a salary review until 2027 and, at this stage, the Committee would expect future
increases to Mark’s salary to be broadly in line with the average increases for UK-based Group roles within Serco
which take into account the approach across the wider organisation.
During recruitment a number of candidates were considered from public, private and private equity backgrounds,
and through this process the Committee gained insight into the level of remuneration that would be required to
externally attract an individual of the right calibre. Mark has prior experience as Group CFO of a listed company,
joining us from Proximus, the Belgium telecoms business listed on the Euronext Stock Exchange. He has been with
Proximus for nearly five years and during that period he has also held the role of interim CEO of their international
division whilst retaining Group CFO responsibilities. Mark has over 20 years’ of international finance experience and
previously held senior roles at Liberty Global, Virgin Media, British Airways and Yahoo Inc.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 119
Implementation of the Policy for 2026
Review of Executive Director base salaries continued
While our decisions are not solely driven by market data, it was another input that fed into the decision. As noted
above, the peer groups and resulting positioning of the CFO’s total remuneration are as follows:
• Primary peer group (FTSE 76–175): Mark’s total remuneration on appointment positions him just below median
against the primary peer group, which is appropriate given the financial positioning of Serco against this group
ofmedian on a market capitalisation and upper quartile on a revenue basis.
• Secondary peer group (UK-based industry peer group): This is particularly relevant as we are acutely aware that
these are the companies that we realistically compete for talent with as we have found through this and other recent
recruitment processes. Mark’s total remuneration is positioned between lower quartile and median against this
peer group.
While we have taken a staggered approach to setting pay on appointment in the past, we do not think it is
appropriate in this case given Mark’s significant and valuable experience and the resulting moderate positioning
against the market data.
Mark’s bonus opportunity for 2026 will be pro-rated to reflect his service in 2026, with any bonus awarded over 100%
of salary subject to mandatory deferral into Serco shares. Mark will receive benefits in line with the Policy, including an
annual pension contribution (or cash equivalent) of 8% of base salary (in line with the wider workforce) along with
relocation support as he and his family relocate to the UK.
In line with the Policy and typical practice, Mark will receive buyout awards to compensate him for remuneration
forfeit from leaving his former employer. The quantum, structure and application of performance conditions match
the awards forfeit, with a longer timeframe applying for the replacement LTIP awards. The details are as follows:
• A cash payment in May 2026 to compensate him for equivalent cash amounts that he would have received at this
date from Proximus. The final value of these payments had not yet been determined at the time of finalising the
Report; however the payment will be equivalent in value, time and form to the amount forfeit and will be confirmed
in the 2026 DRR.
• An award of Serco LTIP shares with a face value of £400,000 in respect of forfeit LTIP awards that were due to vest in
May 2027 and May 2028. These shares will be subject to forward-looking Serco performance conditions in line with
other LTIP participants and will comprise the majority of the buyout award. The award will be made in the form of
Serco shares to ensure immediate alignment to the shareholder experience. In addition, we are replacing the forfeit
awards with one award due to vest in April 2028, thereby extending the aggregate time period.
The Committee is confident that the remuneration arrangements for each of the Executive Directors is sufficient to
attract, retain and motivative them, whilst paying no more than necessary.
Overview of the performance measures for 2026 annual bonus and LTIP awards
The Company strategy continues to be on three core areas which are most significant to driving value and delivering
our strategy; Growth, Operational Excellence and Competitiveness. The 2026 variable pay framework aligns to these
priorities through rigorous target setting, informed by budgets, long-term plans, analyst forecasts and strategic
objectives. The performance measures and weightings for the 2026 annual bonus and LTIP are summarised below:
Annual bonus
Element Link to strategy Weighting
Underlying operating profit
40%
Free cash flow
25%
Order intake
20%
Employee safety
10%
Employee retention
5%
LTIP
Element Link to strategy Weighting
Aggregate EPS
25%
Average ROIC
25%
Relative TSR
20%
Book-to-bill
10%
Organic revenue growth
10%
Employee engagement
5%
Environmental impact
5%
Our key priorities see page 13:
Our ESG Framework see page 34:
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 120
The remuneration framework balances short-term and long-term incentives. The annual bonus rewards delivery
against financial and strategic priorities within a single-year, while the LTIP encourages sustained multi-year
performance aligned with long-term shareholder value. Together, they support both near-term operational delivery
and the Company’s long-term strategic goals, promoting sustainable and responsible performance.
2026 annual bonus
To further support the business in capitalising on the growth opportunity that we see in the market, the weighting of
order intake for the 2026 annual bonus will be increased from 15% to 20% as a core growth metric, placing greater
emphasis on productivity and operational excellence. In addition, the weighting of free cash flow will be increased
from15% to 25%, recognising its critical role in delivering sustainable value for investors. To accommodate the
change towards an increased focus on growth, there will be no personal performance element for the 2026 bonus.
The Executive Directors will, however, continue to be set and appraised against personal objectives agreed with
theBoard.
Determination of the amount payable under the 2026 annual bonus plan will also take into consideration the wider
performance of the Group as well as affordability. The final payouts will be adjusted, where appropriate, to ensure
that the outcomes are a fair and reasonable reflection of the performance of the Group.
2026 LTIP
The framework for the 2026 LTIP will be consistent with the 2025 LTIP award, with measures aligned to the Company’s
focus on long-term sustainable growth. Performance will be assessed over the three years to 31 December 2028. In
determining vesting, the Committee will also consider underlying Group performance (with input from the Audit and
Risk Committees as appropriate) and relevant external benchmarks, with final payouts adjusted, where appropriate,
toensure outcomes are fair and appropriately reflect performance.
The performance measures and targets for the 2026 LTIP awards, based on our longer-term business forecasts and
strategy and analyst consensus, are as follows:
Performance condition and relative weighting Threshold – 25% vesting Target – 50% vesting
7
Maximum – 100%
Aggregate EPS
1
(25%) 53.35p — 58.97p
Average pre-tax ROIC
2
(25%) 25.7% — 28.4%
Relative TSR
3
(20%) Median ranking — Upper quartile ranking
Book-to-bill
4
(10%) n/a 100% 105%
Organic revenue growth
(10%)
5
4% — 6%
Employee engagement
6
(5%) 71 — 73
Environmental impact
7
(5%) 35% reduction in scope 1
and 2 carbon emissions vs
the 2022 base year
n/a 41% reduction in scope 1
and 2 carbon emissions vs
the 2022 base year
1. The EPS targets are based on basic EPS before exceptional items, adjusted to reflect tax paid on a cash basis, measured as an aggregate over the three-year
performance period.
2. The ROIC targets are based on pre-tax ROIC, measured as an aggregate over the three-year performance period.
3. The TSR targets are based on Serco’s ranking relative to companies in the FTSE 250 (excluding investment trusts), measured over the three-year performance.
4. The book-to-bill performance is based on the cumulative average book-to-bill ratio over the three-year performance period.
5. The organic revenue growth targets are measured as a three-point average over the three-year performance period.
6. The environmental impact targets are based on the reduction in Scope 1 and 2 carbon emissions achieved at the end of the three-year performance period
when compared to the 2022 baseline year, reflecting Serco’s ambition to achieve a 46% reduction for scope 1 and 2 carbon emissions by 2030, against the 2022
base year. In accordance with current emissions calculation methodology and standards, these base year emissions (and subsequent years) may be restated
each year to reflect changes in the business. Any restatement changes will be considered in the assessment of the performance against the LTIP stated goals.
7. The Committee considers the book-to-bill targets to be strategically critical to the longer-term success of the Company and so there should be no vesting for
below-target performance for this element; this is a more stringent approach than required under the Policy. This element vests at 50% for on-target
performance, rising on a straight-line basis to 100% at maximum. All other performance measures vest at 25% for threshold performance, rising on a straight-
line basis to 100% at maximum, with no vesting below threshold.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 121
Remuneration for Non-Executive Directors (NEDs)
Following the annual review of NED fees, the Committee (in respect of the Board Chair’s fee) and the Board (in
respect of all other NED fees) determined that a 2.75% increase should apply from 1April 2026 (this is aligned with
the UK-based Group roles and lower than the average increase of 3.0% budgeted for the wider UK workforce). In line
with the approved Policy, the fees to apply in 2026 will be as follows:
Base fee to
apply from
1 April 2026
£
Base fee
1 April 2025
£
Change
£
Element – Annual Board and Committee fees
Board Chair 316,470 308,000 8,470
Senior Independent Director 16,183 15,750 433
Board fees 61,445 59,800 1,645
Chair of a Board Committee (Audit, Corporate Responsibility, Risk or Remuneration) 14,128 13,750 378
Membership of a Board Committee (Audit, Corporate Responsibility, Risk or Remuneration) 5,651 5,500 151
Designated Non-Executive Director 5,651 5,500 151
No additional fee is payable for the Chair or membership of the Nomination Committee. The Board Chair does not
receive any additional fees for his Committee memberships. The fee for the Committee Chair is inclusive of the fee for
being a member of the Committee. The Board is committed to ensuring that remuneration arrangements for each of
the NEDs is sufficient to attract, retain and motivate them and reflects the time commitment required to fulfil their
duties in an increasingly complex global environment, as set out on page 95.
Directors’ service contracts/letters of appointment
In line with our Policy, all Executive Directors have service contracts which are terminable by either party with 12
months’ notice. The Chair of the Board and NEDs have to letters of appointment. The date of appointment to the
Board for all current Directors is set out in their biographies on pages 83 to 85. All Directors are required to be
elected/re-elected at each AGM.
External appointments for Executive Directors
The Board believes that the Group can benefit from its Executive Directors holding appropriate non-executive
directorships of companies or independent bodies. Such appointments are subject to the approval of the Board.
Feesare retained by the Executive Director concerned.
In 2025, Anthony Kirby served as an independent Non-Executive Director at Hays plc (appointed 1 April 2024),
inaddition to his executive role at Serco, and received non-executive Director fees of £64,899.
No other external appointments were held by Executive Directors during the year.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 122
Wider remuneration at Serco
Colleague-centred, fair, and impactful total reward
Our reward principles, which apply to all colleagues, are that reward should be fair, competitive, and aligned to the
sectors and markets from which we draw our talent, while ensuring that we are appropriately managing the cost of
our workforce which, as a people business, is our biggest operating cost.
How our approach to reward is implemented across the organisation
The Committee believes that the structure of the Executive Directors’ reward at Serco should be linked to Serco’s
strategy and performance, and that reward throughout the whole organisation should follow the same philosophy and
underlying principles. The table below provides an overview of how the Policy cascades throughout the organisation.
Element Application
Base salary Salary levels throughout the Group, as far as possible, are set using the same principles applicable to the
Executive Directors. Salaries are reviewed annually, subject to engagement with employee representatives/
unions, where appropriate. Unless exceptional circumstances apply, salary increases for Executive Directors
are normally no more than the average increase of the wider workforce.
Benefits Benefits aligned to local market practice, including wellbeing support, are provided for all employees.
Pension The Group operates various pension/retirement benefits arrangements globally, including cash allowance
alternatives, where appropriate, in line with local market practice.
Annual bonus Approximately 1,600 colleagues, including members of the global leadership team, are invited annually to
participate in the Serco Bonus Plan.
Long-term incentive LTIP awards are made to approximately 150 colleagues in the global leadership team.
Performance graph and table
This graph shows the value as at 31 December 2025, of a £100 investment in Serco on 31 December 2015 compared
with £100 invested in the FTSE 250 index on the same date. It has been assumed that all dividends paid have been
reinvested. The TSR performance for the LTIP awards applies over a different period and details of the Company’s
performance versus the FTSE 250 relevant to the 2025 single figure can be found on page 113.
The TSR level shown at 31 December each year is the average of the closing daily TSR levels for the 30-day period up
to and including that date. The Company chose the FTSE 250 index as the comparator for this graph as Serco has
been a constituent of that index throughout the period.
Serco
FTSE 250 Index
Dec 2015
Dec 2016
Dec 2017
Dec 2018
Dec 2019
Dec 2020
Dec 2021
Dec 2022
Dec 2023
Dec 2024
Dec 2025
0
50
100
150
200
250
300
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 123
Remuneration at Serco
Group Chief Executive’s pay in last 10 financial years
Year ended 31 December 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
1
Group Chief Executive
Rupert
Soames
Rupert
Soames
Rupert
Soames
Rupert
Soames
Rupert
Soames
Rupert
Soames
Rupert
Soames
Mark
Irwin
Mark
Irwin
Mark
Irwin
Anthony
Kirby
Single figure
remuneration (£’000) 2,217 3,681 5,176 5,201 5,219 4,011 4,377 1,939 2,254 1,980 1,860
Annual bonus
outcome (as % of
maximum opportunity) 82% 75% 77% 94% 80% 93% 88% 74% 89% 79% 82%
LTIP vesting outcome
(as % of maximum
opportunity) 24% 91% 73% 71% 99% 89% 90% n/a n/a 94% n/a
1. 2025 was a transition year in which Mark stepped down from Group Chief Executive on 28 February and was succeeded by Anthony from 1 March. The single
figure of total remuneration for each individual is reported separately for their respective period of service during the year.
CEO pay ratio
The table below shows how pay for the Group Chief Executive compares to our UK colleagues at the 25
th
, median
and 75
th
percentiles.
2019
(Option B)
2020
(Option B)
2021
(Option B)
2022
(Option B)
2023
(Option B)
2024
(Option B)
2025
1
(Option B)
UK
colleagues’
salary
2
UK
colleagues’
total pay and
benefits
3
25
th
percentile 1:219 1:186 1:168 1:141 1:80 1:74 1:138 £25,155 £2,668
Median 1:190 1:149 1:139 1:129 1:60 1:70 1:100 £35,955 £2,395
75
th
percentile 1:166 1:142 1:122 1:101 1:56 1:49 1:83 £43,202 £3,096
1. During 2025, Mark served as Group Chief Executive until 28 February 2025 and Anthony was appointed as Group Chief Executive from 1 March 2025. The
CEO pay ratio has been calculated using a blended approach, based on the aggregate remuneration each received for their respective periods in the role.
2. Includes salary enhancements such as shift allowances, unsociable hours payments and overtime.
3. Includes the value of employer pension contributions made to a defined contribution pension arrangement. Each of these representative colleagues
participated in a salary sacrifice pension arrangement.
The calculation methodology used reflects Option B as defined under the relevant regulations. In line with the
relevant regulations this uses the most recently collected and disclosed data analysed within our UK Gender Pay Gap
report, with employees at the three quartiles identified from this analysis and their respective single figure values
calculated. To ensure this data accurately reflects individuals at such quartiles, the single figure values for individuals
immediately above and below the identified employee at each quartile were also reviewed.
The remuneration of Serco’s Group Chief Executive has a significant weighting towards variable pay to align his
remuneration with Company performance. In contrast, due to our workforce profile, all three of our pay ratio
reference points represent frontline operational workforce who are critical to the delivery of the commitments we
make under our contracts every day. In line with market practice for such roles, these colleagues arein receipt of fixed
pay only (including pension contributions).
The Committee believes that the median ratio is consistent with the Company’s pay, reward and progression
policiesfor our UK colleagues, noting that in 2023 and 2024 the comparative Group Chief Executive pay figure is
relatively suppressed due to the reduced variable pay component for Mark Irwin in his first two years in role as
GroupChief Executive.
Relative importance of spend on pay
The table below shows the relative importance of spend on pay compared with distributions to shareholders.
2025 2024 % Change
Total spend on pay £2,311.5m £2,263.3m
2.1%
Dividends and share buyback £93.6m £179.7m
(48)%
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 124
Percentage change in Directors’ remuneration
The table below shows the percentage change in remuneration for all Directors who served during 2025, compared
to that for the average UK employee. The UK employee sub-set of the Company’s global workforce has been chosen
as the group which provides the most appropriate comparator. There are no employees in the Parent Company. The
UK employee population comprises some 20,000 of the approximately 48,000 individuals Serco employs worldwide.
Inflation and local pay practices form a key driver in the salary and benefits provided in each location, and as the
Directors’ pay is set against the UK market (with the Executive Directors based in the UK), we have chosen employees
within the same country.
Executive Directors
Non-Executive Directors
UK
employees
Mark
Irwin
1
Anthony
Kirby
1
Nigel
Crossley
John
Rishton
Keith
Williams
Kirsty
Bashforth
Kru
Desai
Victoria
Hull
Tim
Lodge
Ian El-
Mokadem
Dame
SueOwen
Lynne
Peacock
2025
Salary/fees
2
4% (83%) —% 3% 3% —% 3% 3$ 256% 3% 3% 3% (7%)
Benefits
3
5% (76%) —% 26% 5% —% 89% —% —% (100%) (100%) —% —%
Bonus
4
15% (85%) —% (7%) —% —% —% —% —% —% —% —% —%
2024
Salary/fees
2
5% 2% —% 2% 3% —% 3% 3% —% 3% 3% 5% 3%
Benefits
3
4% 111% —% (26%) 42% —% (8%) —% —% 196% 387% —% —%
Bonus
4
(10%) 24% —% 24% —% —% —% —% —% —% —% —% —%
2023
Salary/fees
2
6% —% —% 10% 3% —% 3% —% —% 3% 4% 10% 3%
Benefits
3
—% —% —% 64% 23% —% (27%) —% —% (38%) —% (17%) 87%
Bonus
4
11% —% —% 3% —% —% —% —% —% —% —% —% —%
2022
Salary/fees
2
5% —% —% 47% 26% —% 1% 467% —% 22% 1% 2% 7%
Benefits
3
2% —% —% 102% 194% —% 435% —% —% 100% —% 100% 1%
Bonus
4
(13%) —% —% 38% —% —% —% —% —% —% —% —% —%
2021
Salary/fees
2
2% —% —% —% 146% —% —% —% —% —% 8% 140% 15%
Benefits
3
2% —% —% —% 128% —% 114% —% —% —% —% —% —%
Bonus
4
21% —% —% —% —% —% —% —% —% —% —% —% —%
2020
Salary/fees
2
2% —% —% —% —% —% 2% —% —% —% 4% —% —%
Benefits
3
(3%) —% —% —% (51%) —% (81%) —% —% —% —% —% —%
Bonus
4
20% —% —% —% —% —% —% —% —% —% —% —% —%
1. 2025 is a transition year, with Anthony succeeding Mark as Group Chief Executive from 1 March. The percentage change shown compares Mark’s full-year
remuneration in 2024 with his pro-rated remuneration for the period served in 2025. As this is Anthony’s first year in the role, no year-on-year comparison is
provided for him.
2. The average salary change for UK employees for 2020 represents the average pay increase applied in the corporate annual pay review effective 1 April 2020.
From 2021, the average salary change for UK employees represents the average level salary change recorded over the relevant financial year, excluding role
changes or promotions, to better reflect our wider workforce pay rates, including those parts of our workforce subject to collective bargaining agreements,
customer-set pay structures, or trade union negotiations. Changes in NED fees reflect changes in each individual’s role on the Board and its Committees, in
addition to the April 2023 fee uplift which was disclosed in the 2022 DRR.
3. The nature of taxable benefits provided to all Directors and employees in 2024 remains the same as in prior years.
4. The bonus element is shown for those employees eligible for such payments. The figures shown for 2025 relate to a calculation of the bonus earned, but not
yet paid, related to performance in 2025 compared to the 2024 bonuses paid in March 2025. The Executive Directors’ 2025 bonus awards over 100% of salary
are subject to compulsory deferral for three years into shares. NEDs do not receive bonus pay.
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 125
Directors’ shareholding and share interests (audited)
Executive Directors
Shares are valued for shareholding guideline purposes using the closing share price of £2.7920 on 31 December
2025 (being the last trading day of the financial year).
Share awards Share options
Name
1
Share
ownership
requirements
(% of salary)
Number of
shares owned
outright at 31
December
2025
2
Shareholding
guidelines
(% of salary) as
at 31 December
2025
Subject to
performance
conditions
4
Not subject to
performance
conditions
5
Not subject to
performance
conditions
6
Exercised
during the
year
Total share
interests at
31December
2025
7
Mark Irwin
3
(until 28 February 2025)
200% 1,810,193 359% 2,338,239 131,412 8,142 — 4,287,986
Anthony Kirby
(from 1 March 2025)
200% 883,579 292% 2,043,140 — 4,390 — 2,931,109
Nigel Crossley 200% 949,845 522% 1,631,389 229,567 4,285 — 2,815,086
1. Anthony and Nigel have met the in-employment shareholding guideline. Mark had met the shareholding guideline at the point he stepped down as Executive
Director and continues to be subject to the post-employment shareholding guidelines.
2. Includes shares owned by closely associated persons. For Mark, the shareholding position reflects the shares owned outright at 28 February 2025, when Mark
stepped down as Executive Director.
3. Shareholding guideline levels are calculated by reference to shares owned outright by the Director and closely associated persons. Shares are valued at the
31December 2025 share price of £2.7920 and expressed as a percentage of the base salary as at 31 December 2025. For Mark, the shares are valued at the
28February 2025 share price of £1.6340 when Mark stepped down as Executive Director.
4. Includes awards made under the LTIP. All awards are in the form of conditional share awards.
5. The unvested awards made under the ESBP relate to the compulsory deferral of bonus into shares and are in the form of conditional share awards.
6. Options over shares pursuant to participation in MyShareSave. These are options granted under a UK Sharesave plan subject to an exercise price at a
maximum discount of 20% of the share price at grant. There are no unvested share options held which are subject to performance conditions.
7. There were no changes in Executive Directors’ interests in the period between 1 January 2026 and the date of this report.
Non-Executive Directors
NEDs do not participate in any share-based incentives and do not hold any interests in shares other than shares
owned outright. NEDs are encouraged to hold shares in the Company but are not subject to a shareholding
requirement.
Name
Number of shares owned outright (including closely
associated persons) at 31 December 2025
2
John Rishton —
Keith Williams —
Kirsty Bashforth 10,000
Kru Desai —
Ian El-Mokadem
1
50,000
Victoria Hull —
Tim Lodge 40,000
Dame Sue Owen 10,000
Lynne Peacock 15,000
1. Jointly held with person closely associated.
2. There were no changes in NEDs’ interests in the period between 1 January 2026 and the date of this report.
Shareholder dilution
Awards under the Company’s share plans are satisfied through newly issued shares or shares held in an employee share
ownership trust, the Serco Group plc 1998 Share Ownership Trust (the Trust), administered by an independent trustee.
The Trust held 13,418,111 and 4,043,139 ordinary shares at 1 January 2025 and 31 December 2025, respectively.
The Committee monitors dilution against the plan limits of 5% for discretionary share plans and 10% for all employee
share plans.
Concluding comments
This DRR has been prepared to ensure that the Company’s remuneration policies align with strategic objectives,
governance principles and shareholder interests. The policies and practices set out in this DRR have been designed
to attract, retain and motivate leadership, supporting Serco’s long-term success. The remuneration framework will
continue to be reviewed and refined to maintain competitiveness, transparency and compliance with evolving best
practices and regulatory requirements.
Victoria Hull
Chair of the Remuneration Committee
4March 2026
Directors’ Remuneration Report continued
Serco Group plc | Annual Report and Accounts 2025 | 126
Articles of Association
The Company’s current Articles of Association (Articles)
were adopted pursuant to a resolution passed at the
AGM held on 24 April 2025 (2025 AGM) and contain,
among others, provisions on the rights and obligations
attached to Serco Group plc’s shares.
The Articles may only be amended by special resolution
at a general meeting of the shareholders in accordance
with applicable legislation.
The current Articles are available on our website.
Share capital and rights attaching to shares
The Company had 1,002,743,103 ordinary shares of
2pence each in issue as at 31 December 2025. Further
details relating to share capital can be found in Note 30
to the Consolidated Financial Statements on page 213.
Without prejudice to any special rights previously
conferred on the holders of any existing shares or class
of shares, any share in the Company may be issued with
such rights (including preferred, deferred or other
special rights) or such restrictions, whether in regard to
dividend, voting, return of capital or otherwise as the
Company may from time to time by ordinary resolution
determine (or, in the absence of any such
determination, as the Directors may determine).
The Company is not aware of any agreement between
shareholders that may result in restrictions on the
transfer of securities and/or voting rights.
Authorities to allot and to disapply pre-emption rights
The powers of the Directors to issue or buy back shares
are restricted to those approved at the Company’s AGM.
At the 2025 AGM, pursuant to Section 570 of the
Companies Act 2006, shareholders approved the
disapplication of pre-emption rights in connection with
the issue of shares for cash up to 10% of the existing
issued share capital and an additional 10% (only to be
used in connection with an acquisition or specified
capital investment) and in connection with a follow-on
offer to existing shareholders not allocated shares
under an issue made pursuant to either of the
authorities. These authorities will expire at the
conclusion of the 2026 AGM, or if earlier, 30 June 2026,
and will be proposed for renewal at the 2026 AGM.
Authority for the purchase of shares
At the 2025 AGM, the Company was granted authority
by shareholders to purchase up to 102,385,524
ordinary shares (10% of the Company’s issued ordinary
share capital). This authority will expire at the conclusion
of the 2026 AGM or, if earlier, 30 June 2026, and will
beproposed for renewal at the 2026 AGM.
As announced on 7August 2025, the Company
undertook a programme to purchase its own shares
with a value of up to £50m. During the year, the
Company purchased a total of 21,112,140 shares with
anominal value of £422,242.80 (representing 2.11% of
the Company’s issued share capital (excluding those
purchased and held in treasury) as at 3December 2025;
the date the repurchase programme was completed)
ata total cost including fees of £50.3m. The Company
has cancelled all shares that were purchased and held
intreasury.
Results, dividends and dividend waiver
The results for the year are set out in the Statement of
Comprehensive Income on page 151. Our Dividend
Policy for 2026 is to increase dividends in line with
earnings over the medium term. The Directors
recommend the payment of a final dividend of 3.05
pence per share for 2025 (2024: 2.82 pence), resulting
in a full-year ordinary dividend of 4.50 pence per share
(2024: 4.16pence).
The recommended final dividend is subject to approval
at the 2026 AGM. The final dividend will be paid on
8May 2026, with an ex-dividend date of 9April 2026
and a record date of 10April 2026. The Serco Group
plc 1998 Share Ownership Trust, an employee benefit
trust, which held 4,043,139 shares in the Company as at
31 December 2025 in connection with the operation of
Serco’s share plans, has lodged standing instructions to
waive dividends (except for 1 pence) on shares held by
it that have not been allocated to employees. The total
amount of dividends waived during 2025 was
£350,888.24.
Directors and Directors’ interests
The names of the Directors who served during the year
can be found in the Board and Committee meeting
attendance chart on page 81.
Directors’ interests in the shares of the Company are
setout on page 126 in the Directors’ Remuneration
Report. None of the Directors had interests in shares of
the Company greater than 1%of the ordinary shares in
issue. There have been nochanges to Directors’
interests in shares since 31December 2025.
Directors’ Report: Other Information
Serco Group plc | Annual Report and Accounts 2025 | 127
Conflicts of interest
Every Director has a duty to avoid a conflict between
theirpersonal interests and those of the Company.
Theprovisions of Section 175 of the Companies Act
2006 and the Articles permit the Board to authorise
situations identified by a Director in which he or she
has, or may have, a direct or indirect interest that
conflicts, or may conflict, with the interests of the
Company. The Board undertakes regular reviews of the
external positions and interests held in and
arrangements made with third parties by each Director
and, where appropriate, authorises such conflicts.
Notwithstanding the above, each Director is aware of
their duty to notify the Board should there be any
material change to their positions or interests during
theyear. Potential and actual conflicts of interest are
considered at Board meetings and, where appropriate,
at Committee meetings. Directors do not participate in
Board discussions or decisions which relate to any
matter in which they have, or may have, a conflict of
interest.
Directors’ liability insurance and indemnities
The Company maintains Directors’ and Officers’ liability
insurance. As permitted under the Articles and in
accordance with best practice, deeds of indemnity have
been executed indemnifying each of the Directors and
the Group General Counsel and Company Secretary in
respect of their positions as officers of the Company as
a supplement to this insurance cover. The indemnities,
which constitute a qualifying third party indemnity
provision as defined by Section 234 of the Companies
Act 2006, remain in force for all current Directors and
the Company Secretary.
Branch offices
The Group’s subsidiary companies have branches in the
following jurisdictions: Abu Dhabi, Bahrain, Dubai, France,
Iraq, Italy, the Kingdom of Saudi Arabia, Qatar, Ras
AlKhaimah, Sharjah and Switzerland.
Significant agreements that take effect, alter or
terminate upon a change of control
Given the business-to-government nature of many of the
services provided by the Company and its subsidiaries,
many agreements contain provisions entitling the other
parties to terminate them in the event of a change of
control, including a takeover of the Company. The
following agreements are those individual agreements
which the Company considers to be significant to the
Group as a whole that contain provisions giving the
other party a specific right to terminate if the Company
is subject to a change of control.
There are no agreements between the Company and its
Directors or employees providing for compensation for
loss of office or employment that occurs because of a
takeover bid.
No Director had a material interest in any contract of
significance in relation to Serco’s business at any time
during the year or at the date of this report.
Material contracts
Clarence Correctional Centre contract: On 14 June 2017,
NorthernPathways Project Trust (of which Serco Australia
Pty Limited was a member at the time) entered into a
project deed with the Australian State of New South Wales
to design, construct and operate a new build prison
named the New Grafton Correctional Centre, the name
of which has subsequently been changed to Clarence
Correctional Centre. Also, on 14 June 2017, Serco
Australia Pty Limited entered into an operator subcontract
with NorthernPathways, pursuant to which Serco was
awarded the rights to operate the prison. The prison
entered operations on 1 July 2020, following acceptance
of the completed Clarence Correctional Centre by the
State (Commencement Date). The operator subcontract
will run for 20 years from the Commencement Date.
Both the project deed and the operator subcontract
contain change of control provisions that provide that
any change of control to an unrelated third-party that
has not been approved by the State of New South
Wales would be a major default. A major default under
either the project deed or operator subcontract, if not
cured, could result in a termination of that contract.
Fiona Stanley Hospital contract: On 30 July 2011, Serco
Australia Pty Limited entered into a contract with the State
of Western Australia (acting through the Department of
Health) for the provision of facilities management
services for the Fiona Stanley Hospital (which was still
under construction at that time). Practical completion of
the Hospital occurred on 6 December 2013 and service
commencement was phased, with fulloperations
commencing on 23 March 2015. The contract had an initial
10-year term with two five-year extension options. In
exercising the first option in 2021, the State of Western
Australia negotiated the return of three service lines
(catering, cleaning and portering) and granted Serco an
additional year for the second term. The current expiry
date is therefore 8 August 2027, with the possibility of a
four-year extension to 8 August 2031. The contract
includes a provision that requires the State’s prior written
approval for any change of control of Serco Australia Pty
Limited (except where the change occurs as a result of any
dealing in securities listed on a stock exchange). The State
may provide its approval subject to conditions or may elect
to terminate the contract if it does not approve the change.
Directors’ Report: Other Information continued
Serco Group plc | Annual Report and Accounts 2025 | 128
Sub-contract relating to the provision of ADF Health
Services by Bupa Health Services Pty (Bupa) to the
Commonwealth of Australia, Department of Defence
(NGHS Contract): On 4 February 2019, Serco Australia
Pty Limited entered into a subcontract with Bupa for the
provision of national garrison health services to the
Commonwealth of Australia, Department of Defence.
The contract had a services commencement date of
1July 2019, with an initial six-year term which was
extended by a further six months until June 2026.
The NGHS Contract includes a change of control
provision that provides that a change of control of the
ultimate holding company, Serco Group plc, requires
Bupa’s prior written consent. If the change is as a result
of market transactions, then Bupa is to be notified as
soon as possible and consent sought after the event.
On request, details of the change and its impact on
Serco Australia Pty Limited’s obligations under the
NGHS Contract are to be provided to Bupa. Bupa may
provide consent to the change subject to conditions. If
Bupa does not consent to the change of control, Bupa
may terminate the NGHS Contract for default.
Special Security Agreement: In order to bid and
perform on certain classified contracts concerning
USnational security interests, Serco Inc. was required
tomitigate its foreign ownership through a Special
Security Agreement (SSA) among the US Department
ofWar (DoW), Serco Inc., and Serco Group plc. The
effective date of the current SSA is 24 September 2024.
The DoW may terminate the SSA in the event of the sale
of Serco Inc. to an entity not under Foreign Ownership,
Control or Influence (FOCI).
CMS Eligibility Support Services contract: In July 2023,
Serco Inc. was awarded a follow-on contract with the US
Government (acting through the Centers for Medicare
and Medicaid Services (CMS)) for the provision of
support for the Exchanges implemented to provide
affordable health insurance and insurance affordability
programmes. The contract has an initial base term of
one year, with four options of one year each, and one
final seven-month option. In the event of a change in
control or ownership of Serco Inc., which in the
reasonable opinion of the US Government adversely
affects the Company’s ability to perform the services,
the contract may be terminated by the US Government.
Anti-Terrorism/Force Protection (AT/FP) Ashore
Program Global Sustainment contract: In February
2021, Serco Inc. was awarded a contract with the US
Government (acting through the Naval Facilities
Engineering Systems Command) to provide sustainment
services for electronic anti-terrorism and force protection
systems at US Navy installations around the world.
The contract has an initial base term of five years, with
one option for an additional three years. In the event of
achange in control or ownership of Serco Inc., which in
the reasonable opinion of the US Government adversely
affects its ability to perform the services, the contract
maybe terminated by the US Government.
Asylum Accommodation and Support Services Contract
(AASC): On 8 January 2019, Serco Limited entered into
contracts with the Secretary of State for the Home
Department (acting through its UK Home Office Visas
and Immigration department) (the Home Office) for
tworegions, being the North West of England and the
Midlands & East of England. Under AASC, Serco is
responsible for the provision of properties for initial
anddispersed accommodation requirements, for
transportation to and from properties, and for a range
of other services to support the welfare of asylum
seekers. The AASC contracts became operational on
1September 2019. The contracts are for a 10-year term.
In the event of a change of control or ownership of
Serco Limited or Serco Group plc, which in the
reasonable opinion of the Home Office adversely
affectsSerco’s ability to perform the services, the
contracts may be terminated by the Home Office.
Agreements relating to the Provision of Defence
Marine Services (DMS): In April and May 2025, Serco
Limited entered into contracts with the Secretary of
State for Defence (MoD) to provide (a) In-Port Marine
Services and Delivery of a Vessel Replacement
Programme (DMS Contract 1); (b) Inshore Support to
Military Training, Testing and Evaluation (DMS Contract
2); and (c) Offshore Support to Military Training and
Exercises (DMS Contract 4), (collectively the DMS
Contracts). The DMS Contract 1 and the DMS Contract
4 each has a 10-year term and the DMS Contract 2 has
afive-year term. In the event of a change of ownership
of Serco Limited or Serco Group plc (or a planned or
intended change of ownership of Serco Limited or
Serco Group plc), the MoD must be notified as soon
asis practicable and, for a period of six months from
receipt of such notice, the MoD shall have the right to
terminate each of the DMS Contracts provided only
thatit acts reasonably in exercising that right.
Concession Agreement relating to the operation of
Merseyrail: Serco Holdings Limited is a 50% shareholder
in Merseyrail Services Holding Company Limited (the
Merseyrail JV Co). Serco Holdings Limited’s joint venture
partner and the other shareholder in the Merseyrail JV
Co is Transport UK Group Limited (following the
acquisition of Abellio Transport Group Limited by its
management team and related restructuring).
Directors’ Report: Other Information continued
Serco Group plc | Annual Report and Accounts 2025 | 129
The Merseyrail JV Co is the concessionaire for the
Merseyrail rail network under a concession agreement
dated 23 May 2003 (the Merseyrail Concession
Agreement) among Merseytravel (the passenger
transport executive responsible for coordination of
public transport in the Liverpool city region), the
Merseyrail JV Co and Merseyrail Electrics 2002 Limited
(the Merseyrail Operating Co). The Merseyrail
Operating Co is a wholly-owned subsidiary of the
Merseyrail JV Co. The Merseyrail Concession
Agreement expires in July 2028 with an option to
extend to July 2033 by agreement of the parties. In the
event there is a change of control of Serco Holdings
Limited or Serco Group plc without Merseytravel’s prior
consent then the Merseyrail Concession Agreement
may be terminated by Merseytravel. In addition, there
would be a requirement under the terms of the joint
venture agreement to consider the representations of
Transport UK Group Limited in relation to the conduct
of any such change of control.
Electronic Monitoring Services (EMS) contract: On
27 October 2023, Serco Limited entered into a contract
with the Secretary of State for Justice (the MoJ) for the
provision of electronic monitoring services, field
monitoring services and other related services. The EMS
contract has an initial six-year term commencing on
1May 2024 and ending on 30 April 2030 with an option
for the MoJ to extend the EMS contract for up to a
maximum of a further two years to 30 April 2032. In the
event of a change of control or ownership of Serco
Limited or Serco Group plc for which the MoJ has not
given its prior written consent, the EMS contract may be
terminated by the MoJ during the six-month period
following the change of control.
Future Defence Infrastructure Services (FDIS)
programme: Serco Holdings Limited is a 50%
shareholder in VIVO Defence Services Limited (the VIVO
JV). Serco Holdings Limited’s joint venture partner and
the other shareholder in the VIVO JV is a UK subsidiary
company of EQUANS SAS (EQUANS Holding UK
Limited) which is now part of the Bouygues Group
(following its acquisition of EQUANS from Engie).
TheVIVO JV performs facilities management services
pursuant to call-off contracts procured by the UK
Defence Infrastructure Organisation (DIO) part of the
UK Ministry of Defence under a Crown Commercial
Services Framework Agreement for the provision of
Workplace Services (RM6089) (the CCS Framework)
aspart of the Future Defence Infrastructure Services
(FDIS) programme.
On 14 June 2021, VIVO entered into two call-off
contracts (one for the Central Region and one for the
South West Region) for Lot 3 contracts under the CCS
Framework for a seven-year term (with the possibility
ofextension for further periods of up to three years)
(theLot 3 Contracts). The Lot 3 Contracts became
operational on 1 February 2022. On 24 June 2021,
VIVO entered into two further call-off contracts (one for
the South East and one for the South West region) for
Regional Accommodation Maintenance Services
(RAMS) under Lot 2b for an initial seven-year term (with
the possibility of extension for further periods of up to
three years) (the Lot 2b Contracts). The Lot 2b Contracts
became operational on 1 March 2022. Under the terms
of the CCS Framework, in the event of a change of
control of VIVO without the prior approval of the DIO,
the Lot 2b Contracts and Lot 3 Contracts may be
terminated by the DIO. In the event that there is a
change of control of Serco Holdings Limited, it is
required to transfer its entire shareholding in the VIVO
JV to Serco Group plc or another wholly-owned
subsidiary of Serco Group plc prior to such change of
control. In the event that there is a change of control of
Serco Holdings Limited without its entire shareholding
in the VIVO JV first being transferred to another
member of the Serco Group or if there is a change of
control of Serco Group plc then, unless the prior
approval of the other shareholder in the VIVO JV is
given, the other shareholder in the VIVO JV is entitled to
purchase the VIVO JV shares and loans held by Serco
Holdings Limited and any other member of Serco
Group plc at fair market value determined by an expert.
Agreement relating to the operation of HMP
Dovegate: In September 1999, Premier Prison Services
Limited (PPSL) entered into a contract with Moreton
Prison Services Limited (MPSL) in respect of the
operation of HMP Dovegate in the UK (the HMP
Dovegate Contract) when MPSL entered into a PFI
project agreement for its design, construction,
management and funding with the Secretary of State for
Justice. The HMP Dovegate Contract was subsequently
amended and novated by PPSL to Serco Limited.
The HMP Dovegate Contract became operational for a
25-year term in July 2001 and expires in July 2026 (with
Serco Limited being successfully awarded the successor
contract for the provision of prison operator services
atHMP Dovegate from July 2026 to July 2038 with
options to further extend the contract to July 2041).
Thecurrent HMP Dovegate Contract is silent on
MPSL’srights on a change of control of Serco Limited
orSerco Group plc.
Directors’ Report: Other Information continued
Serco Group plc | Annual Report and Accounts 2025 | 130
Agreement relating to Armed Forces Recruitment
Programme: In February 2025, Serco Limited entered
into a contract with the Secretary of State for Defence
(MoD) to provide services relating to Armed Forces
Recruitment (the Armed Forces Recruitment Contract).
The Armed Forces Recruitment Contract is currently
being mobilised ahead of full service commencing on
1April 2027 for an initial seven-year term to 31 March
2034 with the MoD having the option to further extend
the contract term by up to a further three years to
31March 2037. In the event of a change of control or
ownership of Serco Limited or Serco Group plc, the
MoD has the right to terminate the Armed Forces
Recruitment Contract unless it has given its prior written
consent (not to be unreasonably withheld) or fails to
give notice of its objection within a period of six months
after the later of the change of control or the MoD
receiving notice of it.
Financing facilities
Revolving credit facility: The Company has a £350m
revolving credit facility dated 18 November 2022 with
asyndicate of banks. The facility provides funds for
general corporate and working capital purposes and
bonds to support the Group’s business needs. The
facility was undrawn as at 31 December 2025.
The facility agreement provides that, in the event of a
change of control of the Company, each lender may,
within a certain period, call for the prepayment of the
amounts owed to it and cancel its commitments under
the facility.
US notes: At 31 December 2025, the Company had US
private placement loan notes outstanding under three
Note Purchase Agreements (the USPP Agreements)
dated 8 October 2020, 27 February 2024 and 15 April
2025, respectively. The total amount of the notes
outstanding under the three USPP Agreements was
US$550m at 31 December 2025, with their maturities
between October 2027 and April 2035. Under the
terms of all the USPP Agreements, if a change of control
of the Company occurs, it is required to offer to prepay
the entire principal amount of the notes together with
interest to the prepayment date but without payment of
any make-whole amount.
Employment policies
The Board is committed to maintaining a working
environment where employees are individually valued
and recognised. Group companies and Divisions
operate within a framework of HR policies, practices,
laws and regulations appropriate to their own market
sector and country of operation, while subject to Group-
wide policies and principles.
Employee engagement
The Group continues to support employee relations
ona local level, working with trade unions to provide
regular updates on key business developments
alongside existing local arrangements. Over the years,
the Group has demonstrated that working with trade
unions and creating effective partnerships allows
improvements to be delivered in business performance
as well as in employment terms and conditions. Where
employees choose not to belong to a trade union,
colleagues can participate in employee partnership
forums which exist to ensure involvement of employees
within the business.
Engagement is driven through established leadership
channels and digital platforms such as the Viewpoint
survey (our employee engagement survey), Viva
Engage (our internal social media platform) and
Colleague ConneXions (a platform which enables
colleagues to have a direct dialogue with Dame Sue
Owen, our Designated Non-Executive Director for
Colleague Voice (see page 89). Speak Up, a confidential
reporting service, is also available to colleagues
(seepage 57).
Employee share schemes
The Company operates a LTIP, in which senior
management can participate. This is a performance-
based plan, which aligns senior management’s interests
with those of shareholders.
The Company’s share plan rules contain provisions in
relation to a change of control. Outstanding options
and awards may vest and become exercisable on a
change of control of the Company, in accordance with
the rules of the plans.
The details of the Company’s employee share
schemes are set out in the Directors’ Remuneration
Report on pages 105 to 126.
Code of Conduct (mycode)
The Group’s Code of Conduct, known as mycode, is
available on our website.
For further information, see page 56.
Human rights
We are committed to complying with laws relating to
human rights, either directly or indirectly, throughout
our business.
For further information, see page 58.
Directors’ Report: Other Information continued
Serco Group plc | Annual Report and Accounts 2025 | 131
Diversity
The Group is committed to ensuring equal opportunity, honouring the rights of the individual, and fostering partnership
and trust in every working relationship. Policies and procedures for recruitment, training and career development
promote diversity, respect for human rights and equality of opportunity regardless of gender, gender reassignment,
sexual orientation, age, marital status, disability, race, religion or other beliefs and ethnic or national origin.
The Group promotes diversity and inclusion so that every employee is able to be successful. The Group gives full and
fair consideration to applications for employment, career development and promotion from persons of disability, and
offers employment when suitable opportunities arise. Wherever practicable, adjustments will be made for persons
with a disability to continue with employment and training.
The Group conducts its employment practices in relation to diversity and inclusion in compliance with applicable
local, state, provincial, and federal laws, regulations, and executive orders in the jurisdictions in which it operates.
Gender identity and ethnicity data
Our gender identity and ethnicity data in accordance with UK LR 6.6.6R as at 31 December 2025 is set out below.
Board and ExCo members are asked to complete a diversity disclosure to confirm which of the categories set out
below they identify with.
Numerical gender data
Board and executive
genderrepresentation
Number of
Boardmembers
1
% of the Board
1
Number of senior
positions on the
Board (CEO, CFO,
Senior Independent
Director and Chair)
Number in Executive
Management
% of Executive
Management
2024 2025 2024 2025 2024 2025 2024 2025 2024 2025
Men 5 6 50 55 3 3 8 6 73 67
Women 5 5 50 45 1 1 3 3 27 33
Other categories 0 0 0 0 0 0 0 0 0 0
Not specified/prefer not to say 0 0 0 0 0 0 0 0 0 0
Numerical ethnicity data
Board and executive
ethnicityrepresentation
Number of
Boardmembers
1
% of the Board
1
Number of senior
positions on the
Board (CEO, CFO,
Senior Independent
Director and Chair)
Number in Executive
Management
% of Executive
Management
2024 2025 2024 2025 2024 2025 2024 2025 2024 2025
White British or other White
(including minority-white groups) 7 9 70 82 3 4 9 9 82 100
Mixed/Multiple Ethnic groups 2 1 20 9 1 0 1 0 9 0
Asian/Asian British 1 1 10 9 0 0 0 0 0 0
Black/African/Caribbean/
BlackBritish 0 0 0 0 0 0 1 0 9 0
Other ethnic group,
includingArab 0 0 0 0 0 0 0 0 0 0
Not specified/prefer not to say 0 0 0 0 0 0 0 0 0 0
1. As at 31 December 2025, the Board comprised 11 Directors. John Rishton was Board Chair until he retired from the Board on 31 December 2025. Board
changes during the year are set out on page 83.
Directors’ Report: Other Information continued
Serco Group plc | Annual Report and Accounts 2025 | 132
Political donations
Shareholder authority to make aggregate political
donations not exceeding £100,000 was obtained at the
2025 AGM. During 2025, neither the Company nor any
of its subsidiaries made any political donations to a UK
political party or other political organisation, or to any
independent election candidate in the UK, or incurred
any UK political expenditure.
For transparency (given the broad definition of
“contribution” in the Large and Medium-sized
Companies and Groups (Accounts and Reports)
Regulations 2008 (SI 2008/410), our Australian
subsidiary joined the business forum of a non-UK
political party, which entailed a membership fee of
AUD$16,000 (GBP £7,625). Local disclosure
requirements were complied with.
Within the US business there exists a Political Action
Committee (PAC), which is funded entirely by
employees. The Serco PAC and its contributions are
administered in strict accordance with regulatory
requirements. Employee contributions are entirely
voluntary and no pressure is placed on employees to
participate. Under US law, an employee-funded PAC
must bear the name of the employing company.
Substantial shareholding
The Company has received the following information in
accordance with Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority (DTR) 5 from
holders of notifiable interests in the issued share capital
of the Company:
As at 31December 2025 As at 4March 2026
Number of
ordinary
shares
% of
issued
share
capital
Number of
ordinary
shares
% of
issued
share
capital
BlackRock, Inc 89,500,140 8.72% 90,053,791 8.97%
FIL Limited 58,087,555 5.67% 51,477,739 5.13%
JPMorgan Asset
Management
Holdings Inc. 53,984,192 5.27% 53,984,192 5.27%
Wellington
Management
International Ltd 50,478,512 4.97% 50,478,512 4.97%
Wellington
Management
Group LLP 50,291,711 5.01% 50,070,364 4.99%
The information provided above was correct at the date of
notification; the details of each holding can be seen in
corresponding announcements on our website. All
ordinary shares and all major shareholders have the same
voting rights. The Company is not, to the best of its
knowledge, directly or indirectly controlled.
Other information
The below sets out only those sections of UK LR 6.6.1R
which are relevant. The remaining sections are
notapplicable.
UK LR
6.6.1R (3) Long-term
incentive schemes
• Directors’
Remuneration Report:
pages 105 to 126
6.6.1R (11) (12) Waiver of
dividends
• Directors’ Report:
Other information:
page 127
Additional information with regards to the Directors’
Report can be found on the following pages:
Further information
Likely future developments in
the Group
• Strategic Report: pages
1to 78
Treasury policies and
objectives for financial risk
management
• Note 28 to the Consolidated
Financial Statements:
pages 200 to 206
Compliance with Section 172
of the Companies Act 2006
• Section 172 Statement:
pages 90 to 92
Post balance sheet events • Note 36 to the
Consolidated Financial
Statements: page 221
Underlying operating profit • Key Performance Indicators:
pages 18 and 19
Research and Development • Note 9 to the Consolidated
Financial Statements:
page182
Disclosures concerning
greenhouse gas emissions
and energy consumption
• Task Force on Climate-
related Disclosures: pages
60 to 65
• Our Impact - data tables:
pages 238 to 243
Going Concern Statement • Note 2 to the Consolidated
Financial Statements:
pages 157
Viability Statement • Pages 76 and 77
The Directors’ Report comprises pages 79 to 133,
together with the sections of the 2025 Annual Report
incorporated by cross reference.
The Directors’ Report on pages 79 to 133, together with
the Strategic Report on pages 1 to 78, serve as the
Management Report for the purpose of DTR 4.1.8R.
Approved by the Board of Directors and signed on its
behalf by:
Amanda Miller
Group General Counsel and Company Secretary
4March 2026
Directors’ Report: Other Information continued
Serco Group plc | Annual Report and Accounts 2025 | 133
The Directors are responsible for preparing the Annual
Report and the Group and Parent Company financial
statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Group
and Parent Company financial statements for each
financial year. Under that law they are required to
prepare the Group financial statements in accordance
with UK-adopted international accounting standards and
applicable law and have elected to prepare the Parent
Company financial statements in accordance with UK
accounting standards and applicable law, including FRS
101 Reduced Disclosure Framework.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and
Parent Company and of the Group’s profit or loss for that
period. In preparing each of the Group and Parent Company
financial statements, the Directors are required to:
• select suitable accounting policies and then apply
themconsistently;
• make judgements and estimates that are reasonable,
relevant, reliable and, in respect of the Parent
Company financial statements only, prudent;
• for the Group financial statements, state whether they
have been prepared in accordance with UK-adopted
international accounting standards;
• for the Parent Company financial statements, state
whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
explained in the Parent Company financial statements;
• assess the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They
are responsible for such internal control as they determine
is necessary to enable the preparation offinancial
statements that are free from material misstatement,
whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably
open to them to safeguard the assets of theGroup and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement that complies with that
law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on our website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule (DTR) 4.1.16R, the financial statements
will form part of the annual financial report prepared
under DTR 4.1.17R and 4.1.18R. The Independent
Auditor’s Report on these financial statements provides
no assurance over whether the annual financial report has
been prepared in accordance with these requirements.
Responsibility statement of the Directors in respect
ofthe Annual Report
The Directors, whose names and functions are set out on
pages 83 to 85, confirm to the best of their knowledge that:
• the financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
• the Management Report includes a fair review of the
development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face.
Each of the persons who is a Director at the date of
approval of this report confirms that:
• so far as the Director is aware, there is no relevant
audit information of which the Company’s auditor is
unaware; and
• they have taken all the steps they ought to have taken
as a Director in order to make themselves aware of any
relevant audit information and to establish that the
Company’s auditors are aware of that information.
We consider the Annual Report, taken as a whole, to be fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy.
By order of the Board
Group Chief Executive Group Chief Financial Officer
4March 2026
Directors’ Responsibility Statement
Serco Group plc | Annual Report and Accounts 2025 | 134
136 Independent Auditor’s Report
150 Consolidated Income Statement
151 Consolidated Statement of Comprehensive Income
152 Consolidated Statement of Changes in Equity
153 Consolidated Balance Sheet
155 Consolidated Cash Flow Statement
156 Notes to the Consolidated Financial Statements
222 Company Balance Sheet
223 Company Statement of Changes in Equity
224 Notes to the Company Financial Statements
Serco Group plc | Annual Report and Accounts 2025 | 135
Financial
Statements
Opinion
In our opinion:
• Serco Group plc’s Group financial statements and Parent Company financial statements (the “financial statements”)
give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2025
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Serco Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2025 which comprise:
Group Parent Company
Consolidated Income Statement for the year ended
31December2025
Company Balance Sheet as at 31 December 2025
Consolidated Statement of Comprehensive Income for the year
ended 31December 2025
Company Statement of Changes in Equity for the year ended
31December 2025
Consolidated Statement of Changes in Equity for the year ended
31 December 2025
Related notes 37 to 52 to the company financial statements
including material accounting policy information
Consolidated Balance Sheet as at for the year ended 31
December 2025
Consolidated Cash Flow Statement for the year ended
31December 2025
Related notes 1 to 36 to the consolidated financial statements,
including material accounting policy information
The financial reporting framework that has been applied in the preparation of the Group financial statements is
applicable law and UK adopted international accounting standards. The financial reporting framework that has been
applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent
Company and we remain independent of the Group and the Parent Company in conducting the audit.
Independent Auditor’s Report
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 136
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of
the Group and Parent Company’s ability to continue to adopt the going concern basis of accounting included:
• The audit engagement partner and senior team members directed and supervised the audit procedures on going
concern, in particular assessing the going concern models, assumptions therein and the result of stress testing
scenarios.
• In conjunction with our walkthrough of the Group’s financial statement close process, we confirmed our
understanding of management’s going concern assessment process and also engaged with management to
ensure key factors were considered in their assessment, including factors which we determined from our own
independent risk assessment.
• We obtained management’s Board-approved forecast cash flows and covenant calculation which covers the period
to 31 March 2027.
• We assessed the completeness and appropriateness of the scenarios modelled by management which included
assessing those assumptions used in each division and how these compare with principal risks and uncertainties of
the Group.
• We assessed the reasonableness of the cash flow forecast by analysing management’s historical forecasting
accuracy, and evaluating the key assumptions used in the forecast. This included considering the forecasts on a
division-by division basis and assessing whether key factors specific to each of the divisions, such as the ability to
win new contracts and successfully retain existing contracts which are being rebid or bids for new contracts, were
considered in management’s assessment. We considered management’s assessment of the impact of climate
change on the Group’s cash flow forecasts.
• We have considered the methodology used to prepare the forecast and covenant calculations. We also tested the
clerical accuracy and logical integrity of the model used to prepare the Group’s going concern assessment.
• We also confirmed the continued availability of credit facilities through the going concern period and reviewed
their underlying terms, including covenants, by examination of executed documentation.
• We considered whether the Group’s forecasts in the going concern assessment were consistent with other forecasts
used by the Group in its accounting estimates, including the assessment of goodwill impairment and the
recoverability of deferred tax assets.
• We performed our own independent reverse stress-test scenario in order to identify what scenarios (for example,
the extent operating profit would need to deteriorate) could lead to the Group utilising all liquidity and/or
breaching the financial loan covenants during the going concern period, and whether these scenarios were
plausible.
• Our analysis also considered the mitigating actions that management could undertake in our own independent
reverse stress test and whether these were achievable and in control of management.
• We considered whether the going concern disclosures included in the annual report were appropriate and in
conformity with applicable reporting standards.
Our key observations
The results from both management’s evaluation and our independent sensitivity analysis and reverse stress-testing
support management’s view that there is only a remote possibility of a scenario in which the Group breaches its
covenants or exhausts its available funding in the going concern period.
As at 31 December 2025, the Group has a secured order book of £14.5bn, and it has a net cash balance of £199.3m
(2024: £183m).
The Group also has substantial borrowing facilities available to it during the going concern period. The undrawn
committed facilities available at 31 December 2025 amounted to £350m.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to
continue as a going concern for the period to 31 March 2027.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 137
Conclusions relating to going concern continued
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report. However, because not all future events or conditions can be predicted.
Overview of our audit approach
Audit scope • We performed an audit of the complete financial information of 5 components and audit procedures on specific
balances for a further 10 components and central procedures on financial statement line items as detailed in the
‘Tailoring the scope’ section below.
Key audit
matters
• Risk of overstatement of revenue as a result of management override
• Risk of misstatement relating to the determination and calculation of onerous contract provisions
• Risk of impairment to goodwill
• Recoverability of deferred tax assets
• Acquisition accounting
Materiality • Overall Group materiality of £9.8m which represents 5% of profit before tax adjusted for the non-recurring profit
on disposal of a subsidiary.
An overview of the scope of the Parent Company and Group audits
We have followed a risk-based approach when developing our audit approach to obtain sufficient appropriate audit
evidence on which to base our audit opinion. We performed risk assessment procedures, with input from our
component auditors, to identify and assess risks of material misstatement of the Group financial statements and
identified significant accounts and disclosures. When identifying components at which audit work needed to be
performed to respond to the identified risks of material misstatement of the Group financial statements, we
considered our understanding of the Group and its business environment, the potential impact of climate change, the
applicable financial framework, the Group’s system of internal control at the entity level, the existence of centralised
processes, applications and any relevant internal audit results.
We determined that centralised audit procedures can be performed on goodwill, investments, going concern, loans
and borrowings, derivative financial instruments, share based payments, finance costs and income, deferred tax asset
recoverability, equity, and consolidation adjustments. These centralised procedures covered total Group balances. In
addition, we performed centralised procedures on the defined pension asset and liabilities balance for the UK
component. We also centrally tested the cash in components that did not form part of the overall scoping assessment
outlined below, to the extent that the total amounts nottested across the Group were immaterial.
We identified 5 components as individually relevant to the Group based on various risk characteristics including
materiality or financial size of the component relative to the Group, relevant events and conditions underlying the
identified risks of material misstatement of the Group financial statements being associated with the reporting
components, or pervasive risks of material misstatement of the Group financial statements or a significant risk or an
area of higher assessed risk of material misstatement of the Group financial statements being associated with the
components. These were the large trading businesses in the UK, North America, Australia, the VIVO joint venture, and
the Group corporate function which include the Parent Company, Serco Group plc. We then identified an additional
10 components as additionally relevant to the Group based on the materiality of specific accounts relative to the
Group or due to the presence of significant events and conditions underlying the identified risks of material
misstatement of the Group’s financial statements. These comprised a number of the Group’s other key operating
businesses across UK and Europe, Asia Pacific, the Middle East and the Merseyrail joint venture.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 138
For those individually relevant components, we identified the significant accounts where audit work needed to be
performed at these components by applying professional judgement, having considered the significant Group
accounts on which centralised procedures will be performed, the reasons for identifying the financial reporting
component as an individually relevant component and the size of the component’s account balance relative to the
significant Group financial statement account balance.
We then considered whether the remaining significant Group account balances not yet subject to audit procedures,
inaggregate, could give rise to a risk of material misstatement of the Group financial statements. We addressed
thisrisk through performing centralised procedures and other analytical procedures.
Having identified the components for which work will be performed, we determined the scope to assign to
eachcomponent.
Of the 15 components selected, we designed and performed audit procedures on the entire financial information of
5 components (“full scope components”). For 10 components, we designed and performed audit procedures on
specific significant financial statement account balances or disclosures of the financial information of the component
(“specific scope components”).
Our scoping to address the risk of material misstatement for each key audit matter is set out in the key audit matters
section of our report
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be
undertaken at each of the components by us, as the Group audit engagement team, or by component auditors
operating under our instruction.
The Group audit team followed a programme of planned visits designed to ensure that senior audit team members
visit those components which are individually relevant to the Group. During the current year’s audit cycle, visits were
undertaken by the primary audit team to the component teams in UK & Europe, North America, Asia Pacific and the
Middle East. These visits involved procedures designed to provide us with appropriate evidence for our opinion on
the Group financial statements and included procedures such as the following: discussing the audit approach with
the component team and any issues arising from their work; meeting with local management to discuss risks and
judgements; attending planning meetings; and reviewing relevant audit working papers on risk areas. In addition to
the visits, regular video conferences were held with component teams and regional management to discuss any
issues arising from their work or findings from testing performed in the regions. The Group audit team interacted
regularly with the component teams where appropriate during various stages of the audit, reviewed relevant working
papers and were responsible for the scope and direction of the audit process. Where relevant, the section on key
audit matters details the level of involvement we had with component auditors to enable us to determine that
sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole. One of the five
individually relevant components relates to the main operating business of the UK. The audit of this component is led
by the Senior Statutory Auditor of the Group.
As explained by the Directors on page 129 in the Directors’ Report, Serco Inc operates under a Special Security
Agreement (SSA) with the US Department of Defence which sets out specific protocols that foreign controlled
companies must comply with to be able to undertake government defence contracts in the US. The SSA places
certain restrictions on access to information outside of US borders including restrictions on information contained
within audit files for non-US nationals. In response, we performed alternative procedures to enable appropriate
oversight of our North America component team. Because of the SSA restrictions, we as the Group team:
• selected a more senior local audit partner to lead our North America team;
• reviewed all of the management-prepared accounting papers across key risk areas within the parameters of what
can be shared; and
• increased the extent of formalised reporting from our North America component team detailing the work
performed.
This, together with the additional procedures performed at Group level, and the general oversight procedures
described above, gave us appropriate evidence for our opinion on the Group financial statements.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 139
Climate change
Stakeholders are increasingly interested in how climate change will impact Serco Group plc. The Group has
determined that the most significant future impacts from climate change on their operations will be from physical risks
from extreme weather, changes in long-term weather patterns, and transition risks from a policy, legal,technology,
market and reputation perspective. These are explained on pages 60 to 65 in the required Task Force on Climate-
related Financial Disclosures and on pages 69 to 75 in the principal risks and uncertainties. They have also explained
their climate commitments on pages 49 to 53. All of these disclosures form part of the “Other information,” rather
than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted solely
ofconsidering whether they are materially inconsistent with the financial statements or our knowledge obtained in
thecourse of the audit or otherwise appear to be materially misstated, in line with our responsibilities on
“Otherinformation”.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business
and any consequential material impact on its financial statements.
The Group has explained in its accounting judgements in note 3 how they have reflected the impact of climate
change in their financial statements, including how this aligns with their commitment to the aspirations of the Paris
Agreement to achieve net zero emissions by 2050. Significant judgements and estimates relating to climate change
are included in note 3. This explains Management’s consideration of the impact of climate change in respect to (a)
estimates of future cash flows used in impairment assessments of the carrying value of goodwill, (b) the useful
economic life of plant, equipment, (c) valuation of retirement benefit obligations, (d) valuation of assets, and (e)
valuation of share-based payments linked to ESG targets. Whilst Management disclosed that they have not identified
significant risks induced by climate changes that could negatively and materially affect the Group’s financial
statements, they are aware of the variable risks arising from climate change and thus they will regularly assess these
risks against judgement and estimates made in preparation of the Group’s financial statements.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating
Management’s assessment of the impact of climate risk, physical and transition, their climate commitments, the effects
of material climate risks disclosed on pages 60 and 65 and the significant judgements and estimates disclosed in note
3 and whether these have been appropriately reflected in asset values where these are impacted by future cash flows,
and in the timing and nature of liabilities recognised following the requirements of UK-adopted international
accounting standards. As part of this evaluation, we performed our own risk assessment, supported by our climate
change internal specialists, to determine the risks of material misstatement in the financial statements from climate
change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and
viability and associated disclosures. Where considerations of climate change were relevant to our assessment of
going concern, these are described above.
Based on our work, whilst we have not identified the impact of climate change on the financial statements to be a
standalone key audit matter, we considered the impact on the key audit matters we have identified which rely on the
use of the Group’s future cash flows including the risk of impairment to goodwill, recoverability of deferred tax assets
and acquisition accounting. We concluded that the impact of climate changes does not have a significant impact on
any of these key audit matters. The details of the impact, our procedures and findings on the Group’s future cash
flows are included within the work performed over the risk of impairment to goodwill section below and are not
repeated in the other key audit matters.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these matters.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 140
Risk Our response to the risk
Risk of overstatement of revenue as a result of management
override (2025: £4,876.8m, 2024: £4,787.3m)
Refer to Accounting policies (pages 158–160); and Note 7
ofthe Consolidated Financial Statements (pages 180–181)
The Group’s revenue recognition involves complex
contractual arrangements, particularly around variable
revenue, requiring significant estimation and judgement.
This creates a risk of misstatement, including potential
manipulation through topside journal entries. The key
judgements impacting the recognition of revenue and profit
which underpins the risk are:
• The recognition and interpretation of contract-level KPIs,
which may influence Management’s view of contract
performance and profitability. This could be through a
breach of a KPI leading to a financial penalty, or the
achievement of a KPI which could allow the Group to bill
additional revenue.
• The assessment of percentage of completion and cost to
complete for contracts where revenue and profit is
recognised over a period of time, considering contractual
obligations, extension periods, customer negotiations and
judgement required in forecasting cost to complete.
• The assessment of current and future financial
performance of contracts as the Group deals with multiple
unique contractual arrangements, such as contractual
obligations and terms and conditions, that underpin the
measurement and recognition of revenue which can
becomplex.
For relevant components with material revenue balances:
• We performed walkthroughs of the revenue processes and
assessed the design effectiveness of key controls. We did not test
the operating effectiveness of these controls.
• We reviewed and understood the terms and conditions of a sample
of signed contracts.
• We obtained a detailed listing of contract assets at year end and
assessed the recoverability through post year end billings and
cashreceipts.
• We performed site visits for a selection of contracts within our
sample population to gain operational insight into contract
performance to support our audit procedures on the
reasonableness of revenue recognition. We also performed contract
meetings with contract managers for all sampled contracts.
• We verified the accuracy of revenue recognised over time based on
progress and cost estimates and assessed the reasonableness of
cost-to-complete estimates by comparing to historical trends and
post-year-end developments. We understood key events and
conditions (e.g., political, operational, or delivery issues) that could
affect contract performance and assessed if management’s
assumptions appropriately consider any cost impact.
• We performed journal entry testing with a focus on topside entries
affecting revenue or contract assets/liabilities for timing, rationale,
authorisation and supporting documentation.
• We performed disaggregated analytical review by revenue stream
and, where applicable, by underlying revenue data points,
investigating any trends outside of expectations.
• We used data analytics to complete a correlation of all revenue
transactions recognised during the period for in-scope components
through to trade receivables and cash receipts. We performed
additional substantive testing on a sample of journal entries not
following the expected flow of transactions.
• We reviewed the Group’s revenue accounting policy in accordance
with IFRS 15.
• We reviewed the Group’s disclosures in relation to revenue
recognition in the Annual Report and Accounts to confirm the
adequacy of disclosure of the Group’s revenue accounting policy
and associated judgements
Key observations communicated to the Audit Committee
From the audit procedures performed, we conclude that the recognition of revenue was appropriate and we did not identify non-
standard journals outside the expected flow from revenue to receivables to cash which were inappropriate or fraudulent. Revenue
recognition was consistent with the accounting policy to be applied to all contracts with customers, and the presentation and
disclosure of revenue is materially correct.
How we scoped our audit to respond to the risk and involvement with component teams
We instructed our component teams to perform, full and specific scope audit procedures over this risk in 12 locations. Our total
procedures covered 91% of the Group’s revenue. For the remaining 9% of the Group, we performed analytical procedures to
address the risk of material misstatement. These procedures were determined on a risk basis and included procedures such as:
obtaining explanations for significant changes in revenue year on year, analysing the ratio between revenue and contract assets for
unusual anomalies, and performing journal entry testing.
We reviewed key audit workpapers, attended meetings with divisional management to discuss the audit approach and key findings,
and maintained regular communication with component teams to ensure alignment and address any issues that arose during the
audit process.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 141
Risk Our response to the risk
Risk of misstatement relating to the determination and
calculation of onerous contract provision (2025: £25.0m,
2024: £19.8m)
Refer to the Audit Committee Report (page 100); Accounting
policies (page 168); and Note 25 of the Consolidated
Financial Statements (pages 198–199)
There is a risk around the determination and calculation of
onerous contract provisions. This risk arises from the
inherent complexity and subjectivity involved in assessing
whether a contract has become loss-making and in
quantifying the resulting provision.
The risk arises from the judgement required in ascertaining
the performance (risks and opportunities) of a contract to
determine whether it is onerous, and provision is required.
Included in the risks and opportunities is the allocation of
enabling services recharges which could be applied
incorrectly to contracts due to error and subjectiveness.
The key judgements impacting this risk include:
• The assessment by Management to determine whether
the unavoidable costs of fulfilling the contract exceed the
expected economic benefits.
• The judgement involved in defining the scope of costs
toinclude (e.g., direct vs. indirect costs) and deciding
whether to assess contracts individually or as part of
aportfolio.
The estimates impacting this risk include the forecast of total
contract costs, which may be affected by cost control, supply
chain volatility, or changes in scope, or the expected
revenue, including any variable consideration such as
performance bonuses or penalties. All of these estimates
aresubject to change over the life of the contract and
require regular reassessment to ensure the provision
remains appropriate.
The total onerous contract provision includes a central risk
provision (2025: £8.0m, 2024: £6.6m) recorded at the Group
level to ensure that there is adequate coverage for identified
and potential onerous contracts and is recorded over-and-
above any onerous contract provisions recorded at the
divisional level.
• For all relevant components with material revenue balances or
onerous contract provisions: We performed walkthroughs of the
onerous contract provision process and assessed the design
effectiveness of key controls. We did not test the operating
effectiveness of these controls.
• We reviewed Management’s paper outlining the basis for onerous
contract provision allocations. We assessed whether the
methodology is consistent with IAS 37 and whether key assumptions
and estimates are reasonable and supported by evidence.
• We assessed the accuracy of the allocation of Enabling Services
recharge model. This included testing the integrity of formulas,
verifying casting, and ensuring consistency of logic throughout
themodel.
• We evaluated the basis of cost allocation used in the model to
ensure it aligns with the requirements of IAS 37. This involved
reviewing the rationale for including or excluding specific cost
categories and assessing whether only direct costs to fulfil the
contract are considered.
• We performed a variance analysis on the enabling services recharge
model, comparing budgeted costs to actuals. Where significant
variances were identified, we assessed whether they indicate
inappropriate budgeting or misallocation of costs that could affect
the identification of onerous contracts.
• For a sample of contracts, we performed procedures to ensure only
costs relevant to the contract are recognised to identify any
instances of cost shifting by Management.
• We reviewed post-year-end developments, including project
updates, cost revisions, and client correspondence, to identify any
events that may indicate the need to adjust or reassess the onerous
contract provisions recognised at year-end.
• We reviewed Management’s assessment for how the central risk
provision has been quantified at the Group as at 31 December 2025
and assessed whether the provision when combined with any
onerous contract provision recorded at the component level meets
the recognition criteria of IAS 37.
Key observations communicated to the Audit Committee
From the audit procedures performed, we conclude that the total onerous contract provision recorded at a Group level was sufficient
and appropriate, that the judgements made by Management are materially consistent with the accounting policy, and that the
presentation and disclosure is materially correct.
How we scoped our audit to respond to the risk and involvement with component teams
We instructed our component teams to perform full and specific scope audit procedures over this risk in 12 locations. Our total
procedures covered 100% of the Group’s onerous contract provision. As outlined in the risk of overstatement of revenue key audit
matter section above, we tested 91% of the Group’s revenue including challenging the accuracy of contract performance and cost-to-
complete estimates. This work addresses the risk of incompleteness over other onerous contract provisions not recognised.
We reviewed key audit workpapers, attended meetings with divisional management to discuss the audit approach and key findings,
and maintained regular communication with component teams to ensure alignment and address any issues that arose during the
audit process.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 142
Risk Our response to the risk
Risk of impairment to goodwill (2025: £929.3m, 2024:
£826.2m)
Refer to the Audit Committee Report (page 100); Accounting
policies (page 163); Critical accounting judgements and key
sources of estimation uncertainty (page 170); and Note 16 of
the Consolidated Financial Statements (pages 188–190)
Under IAS 36, an entity must assess intangible items with
anindefinite useful life annually, or whenever indicators of
impairment are present for all other assets.
Management applies judgement in assessing the valuation
of goodwill, particularly in estimating future cash flows and
deriving the appropriate discount rates. There is a risk that
impairments are not identified, and that the value of
goodwill is overstated.
No impairment has been recognised (2024: £114.5m)
• We understood the annual goodwill impairment process and
assessed the design effectiveness of key controls.
• We compared Management’s process and methodology against the
requirements of IAS 36 Impairment of Assets, including reviewing
Management’s paper on the group of cash generating units (“GCGUs”).
• We validated the mathematical accuracy of the model Management
uses to quantify its impairment assessment.
• We compared the discount rates and growth rates used by
management to a range of acceptable outcomes determined
independently by EY specialists.
• We challenged Management in relation to the key assumptions
included within the forecast through enquiries of local
management, project managers, as well as comparing the
assumptions used to external market data. We also assessed the
impact of climate change considerations on the future cash flows.
• We ensured consistency of key assumptions with forecasts used in
other management assessments, including going concern.
• As a result of current political and macroeconomic uncertainty, we
focussed on how the impacts have been considered within the
forecast assumptions for the impairment assessment. This included
challenging the assumptions around future win rates applied to new
business and rebid/contract extension opportunities.
• We searched for any contradictory evidence, including whether any
indicators of impairment are omitted from Management’s
assessment, through review of Board minutes, analyst reports, press
reports and other enquiries of Management. We also challenged
Management as to the robustness of the process performed by
discussing potential external and internal sources of indicators
ofimpairment.
• We assessed the adequacy of sensitivity analysis performed by
Management and performed additional sensitivities for known
uncertainties within the business that may not have been modelled
directly by Management. This included consideration of the impact
of other relevant economic, political and social environmental
factors such as inflation, relevant government policies (e.g. on
immigration), on future cash flows.
• We assessed the historical accuracy of Management’s forecasting
process through reviewing forecast versus actuals analyses for the
current year.
• We reviewed the Group’s disclosures in accordance with the
requirements of IAS 36 and IAS 1 to confirm the adequacy
ofdisclosure.
Key observations communicated to the Audit Committee
We focussed primarily on the Asia Pacific GCGUs (Goodwill: £10.3m), which we assessed to be most sensitive to changes in key
assumptions, following the £114.5m impairment in the prior financial year as a result of the Group being unsuccessful in its rebid of
the key Australia immigration contract.
We concluded that there was no impairment in the current year noting that current year performance exceeded budget with the
successful implementation of cost saving measures following the prior year loss of the immigration contract. Despite this
improvement, the goodwill is sensitive to changes in key assumptions, notably its new business win rate and rebid and extension win
rate. As a result, we have ensured that adequate disclosures have been made in the annual report regarding the key sensitivities and
assumptions.
For the remaining goodwill balances, there is sufficient headroom to support the carrying value, and our sensitivity analysis
demonstrated the impairment assessment is not sensitive to reasonable changes in key assumptions.
We concluded that Management has accounted for the carrying value of goodwill appropriately and has included sufficient
disclosure over the key assumptions and sensitivities impacting the group of CGUs in note 16.
How we scoped our audit to respond to the risk and involvement with component teams
All audit work performed to address this risk was undertaken centrally by the Group engagement team, covering 100% of the
goodwill balance. Component teams have supported the Group engagement team in assessing the growth rates and achievability of
the cash flows based on their understanding of the business and local market and industry conditions.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 143
Risk Our response to the risk
Recoverability of deferred tax assets (2025: £208.2m,
2024: £229.8m)
Refer to the Audit Committee Report (page 100); Critical
accounting judgements and key sources of estimation
uncertainty (pages 171–172); and Note 14 of the
Consolidated Financial Statements (pages 186–188)
Under IAS 12 deferred tax assets are recognised when it is
probable that they will be utilised against future taxable
profits. Therefore, an entity should only recognise a net
deferred tax asset to the extent that sufficient taxable profit
will be available in the future. The recognition of the asset
therefore depends on Management’s assessment of future
taxable income, including estimating the rates at which the
business will win new business, rebids and extensions.
Management also applies judgement in estimating the
length of the period for which future taxable profits can be
utilised in the future.
Management reviews the carrying amount of deferred tax
assets at each reporting date and, if necessary, revises the
balance to reflect the level of future taxable profits.
• We performed a walkthrough of the income tax process including
financial reporting and taxable profit forecasting and assessed the
design effectiveness of key controls. We did not test the operating
effectiveness of these controls.
• We evaluated Management’s rationale for the forecast periods
selected in determining the likelihood of generating suitable future
profits to support the recognition of deferred tax assets and we
challenged the businesses’ long term taxable profit forecast, in
particular the key assumptions which include the success rate for
winning new business, rebids and extensions.
• We evaluated the historical accuracy of forecasting taxable profits,
noting the reasons for deviations from expectations, the integrity of
the forecast models and the consistency of the projections with
other forecasts made by Management (such as in goodwill
impairment, corporate viability and going concern assessments)
and approved by the Board. For forecasts that assume taxable
profits beyond the Board-approved business plan, we considered
how these forecasts had been prepared and challenged the
forecast profitability.
• We reviewed any differences between the free cash flow forecasts
used for goodwill impairment to the taxable profit forecast used for
deferred tax asset recoverability. We engaged our EY tax team to
assist in assessing the appropriateness of any differences and
agreed reconciling items to underlying support.
• We considered the impact of the restrictions imposed by local tax
laws on using carried forward losses and assessed the
appropriateness of Management’s assessment that they will be used
during the forecast period. As part of this, we considered any
statutory prescribed time limits to the period for which a deferred
tax asset can be recognised.
• We considered the basis for Management’s judgements and the
extent of risk involved in our evaluation of their position.
• We considered the accuracy and appropriateness of related
disclosures and offsetting of deferred tax balances in the Group
financial statements.
Key observations communicated to the Audit Committee
We challenged Management on the basis of considering forecast profits beyond the formal five-year planning horizon approved by
the Board for the Australia business.
Whilst we recognised there is no expiry date on the utilisation of a deferred tax asset, we challenged the reliability of the longer-term
profit forecasts given the nature of the Australia business, with the majority of contracts within the business expiring prior to 2030,
following the exit of the Australia immigration business and the loss of all the Base Services Transformation Programme (BSTP) bids
during 2025 which had a contract duration potential of up to 10 years.
As a result of this, Management limited the deferred tax asset recognition relating to Australia to five years. This limitation resulted in
the derecognition of £17.3m, resulting in the Australian deferred tax asset of £27.7m at 31 December 2025 (2024: £50.5m).
For the UK deferred tax asset (2025: £175.7m, 2024: £177.5m), Management forecast longer term trading profits to 2043.
We concluded Management’s judgement to consider longer term forecast profits of the UK business to be appropriate and
supported by the longer-term nature of contracts in the division compared to others, as demonstrated by key contractual wins in
2025. In addition, Management evidenced a strong pipeline of new business, alongside a consistently strong win rate, and track
record of delivering consistent profitability.
We concluded that the deferred tax asset recognised at 31 December 2025 of £208.2m, is recoverable and supported by future
profitability.
How we scoped our audit to respond to the risk and involvement with component teams
All audit work performed to address this risk was undertaken centrally by the Group engagement team, covering 100% of the
balance. Component teams have supported the Group engagement team in assessing the growth rates and achievability of the
forecasted taxable profits based on their understanding of the business and local market and industry conditions.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 144
Risk Our response to the risk
Acquisition accounting of MT&S (2025: Acquisition value of
£245.3m)
Refer to the Audit Committee Report (page 100); Accounting
policies (page 162); Critical accounting judgements and key
sources of estimation uncertainty (page 172); and Note 6 of
the Consolidated Financial Statements (pages 178–179)
In May 2025, the US business acquired Northrop Grumman’s
mission training and satellite ground network communications
software business (MT&S) for $327m (£242m).
Management have fair valued the acquired assets and
assumed liabilities but involved external specialists to fair
value the identified intangible assets being customer
relationships. Based on the above, Management recognised
an intangible asset relating to customer relationships of
£89.3m and goodwill of £140.8m.
The valuation of the goodwill and acquired intangibles as
part of the acquisition accounting is judgemental and
involves complexity based on the reliance of estimates
around future forecast information and the length of useful
economic lives of intangible assets.
• We performed a walkthrough to obtain an understanding of the
process and related controls in place for acquiring new businesses.
We did not test the operating effectiveness of these controls.
• We obtained and inspected the sale and purchase agreement
togain an understanding of the terms and conditions of
thetransaction.
• We assessed the accounting paper prepared by Management,
which sets out Management’s assessment of this transaction being
accounted for as a business combination per IFRS 3.
• We assessed whether the identified intangible assets meet the
criteria for recognition and measurement separate from goodwill as
required by IFRS 3 and assessed whether there are intangible assets
that should have been recognised but which have been omitted.
• We tested consideration transferred to the acquisition agreement
and supporting documentation and to the total amount recorded
and disclosed. We reviewed and confirmed that there were no
elements of deferred or contingent consideration. We also
performed testing of underlying transaction costs to supporting
documentation.
• We engaged our EY valuation specialist to audit the
appropriateness of the methodology and key assumptions used by
Management’s specialists to determine the valuation of intangible
assets, including assessing the appropriateness of the length of
useful economic lives.
• We assessed the appropriateness of the prospective financial
information, including the projections made for key inputs such as
forecast revenue, EBITDA margin, the recompete rate and the
recompete period. We compared these inputs to sources of internal
and external evidence and historical performance.
• We obtained the opening balance sheet and tested whether the
assets acquired and liabilities assumed have been appropriately
recognised and measured in accordance with IFRS 3.
• We assessed the allocation of goodwill arising on acquisition to the
appropriate GCGU.
• We engaged our EY tax team to assess the appropriateness of
thetax assumptions considered in the acquisition accounting.
Thisincluded assessing the appropriateness of relevant deferred
taximpacts.
• We reviewed performance of the business subsequent to
acquisition to assess for any indicators of impairment.
• We reviewed the Group’s disclosures are in accordance with the
requirements of IFRS 3, to confirm the adequacy of disclosure.
Key observations communicated to the Audit Committee
We concluded that the methodology and key assumptions used to determine the valuation of intangible assets (including goodwill)
were appropriate, and the valuation of the intangible asset (customer relationships) sits within what we consider to be an
acceptablerange.
MT&S was integrated within the North America Operating Segment during the financial year. We challenged Management to
perform an assessment for indicators of impairment for the standalone MT&S business prior to this integration into the North
America CGUs grouped for impairment testing purposes. No such indicators were identified, and we note the business’s full year
profit was in line with that budgeted.
How we scoped our audit to respond to the risk and involvement with component teams
We tested 100% of the acquisition, and procedures were performed by both the Group engagement team and North America
component team.
We reviewed key audit workpapers, attended meetings with divisional management to discuss the audit approach and key findings,
and maintained regular communication with component teams to ensure alignment and address any issues that arose during the
audit process.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 145
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected
to influence the economic decisions of the users of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £9.8m million (2024 predecessor auditor: £9.7 million), which is 5%
(2024 predecessor auditor: 4.6%) of profit before tax adjusted for the non-recurring profit on disposal of a subsidiary.
We believe that profit before tax adjusted for the non-recurring profit on disposal of a subsidiary provides us with the
most important metric to understand the financial performance of the business.
We determined materiality for the Parent Company to be £10 million (2024 predecessor auditor: £4.4 million), which
is 1% of net assets. The predecessor auditor determined materiality based on the component materiality for the
Parent Company determined by the Group auditor. This was lower than the materiality that would otherwise have
been determined with reference to the Parent Company total assets, of which it represented 0.2%.
During the course of our audit, we reassessed initial materiality and noted that there was a decrease compared with
the original assessment attributable to the performance and profit before tax of the Group. The underlying basis of
materiality was not changed compared with the planning stage.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our
judgement was that performance materiality was 50% (2024 predecessor auditor: 75%) of our planning materiality,
namely £4.9m (2024 predecessor auditor: £7.3m). We have set performance materiality at this percentage as we do
not have sufficient evidence in an initial audit to conclude that the likelihood of misstatements to occur is lower.
Auditwork was undertaken at component locations for the purpose of responding to the assessed risks of material
misstatement of the Group financial statements. The performance materiality set for each component is based on the
relative scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that
component. In the current year, the range of performance materiality allocated to components was £0.9m to £3.4m.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of
£0.5m (2024 predecessor auditor: £0.5m), which is set at 5% of planning materiality, as well as differences below that
threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above
and in light of other relevant qualitative considerations in forming our opinion.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 146
Other information
The other information comprises the information included in the annual report set out on pages 1 to 134, including
the Strategic Report and Corporate Governance section, other than the financial statements and our auditor’s report
thereon. The Directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment
obtainedin the course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
usto report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group and Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 157;
• Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why
the period is appropriate set out on page 76;
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 147
Corporate Governance Statement continued
• Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation
and meets its liabilities set out on page 76;
• Directors’ statement on fair, balanced and understandable set out on page 134;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
page69;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 66; and
• The section describing the work of the Audit Committee set out on page 97.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 134, the Directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Theextent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the Company and Management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and
determined that the most significant are health and safety, data protection, anti-bribery and anti-corruption,
employment law and national security law. We also identified those most significant to financial reporting as the
reporting framework (UK adopted international financial accounting standards, FRS 101, United Kingdom Generally
Accepted Accounting Practice, the Companies Act 2006 and the Corporate Governance Code), distributable
profits legislation, pension legislation and the relevant tax compliance regulations in the countries of operations of
the reporting components.
• We understood how Serco Group plc is complying with those frameworks by making enquiries of Management,
reviewing Management procedures for oversight by those charged with governance (i.e. considering the potential
for override of controls or other inappropriate influence over the financial reporting process, such as efforts by
Management to manage earnings in order to influence the perceptions of analysts as to the Group’s performance
and profitability), the culture of honesty and ethical behaviour and whether a strong emphasis is placed on fraud
prevention, which may reduce opportunities for fraud to take place, and fraud deterrence. We corroborated our
enquiries through our review of Board minutes and any correspondence with external legal counsel, and
discussions with the Audit and Risk Committees, and those responsible for legal and compliance procedures
including the Company Secretary.
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 148
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud
might occur by meeting with Management to understand where they considered there was susceptibility to fraud.
We also considered performance targets and their influence on efforts made by Management to manage earnings
or influence the perceptions of analysts. Where this risk was considered to be higher, we performed audit
procedures to address each identified fraud risk. The key audit matters section above covers those procedures
performed in areas where we have concluded the risks of material misstatement are highest, including where we
have identified a risk of fraud. These procedures included testing manual journal entries, a focus on key estimates,
and considerations over information produced by the entity including work over the authenticity of key evidence
received during the audit.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and
regulations. All full and specific scope components were instructed to perform procedures in the identification of
instances of non-compliance with laws and regulations, supplemented by audit procedures performed at a Group
level. Findings from these procedures were discussed with the team and supporting workpapers reviewed for
individually relevant components. Our procedures involved review of Board minutes to identify non-compliance
with such laws and regulations, review of reporting to the Audit and Risk Committee on compliance with
regulations and enquiries of legal counsel, internal audit, Group Management and all full and specific scope
management.
• Through our oversight of the component teams in the Group, we ensured that any instances of non-compliance
with laws and regulations identified were communicated and discussed between the Group team in the UK and the
relevant local EY teams in the countries impacted. We ensured that the component teams performed sufficient and
appropriate audit procedures to respond to the risk of non-compliance with local laws and regulations, and
supplemented this by audit procedures performed at the Group level to consider any further UK impact where
necessary. For such instances, we performed further procedures, such as reviewing legal advice obtained by
Management, inspecting external correspondence, and enquiring with and receiving direct confirmation from
external legal counsel. Where necessary, we engaged internal professionals with more specialised knowledge such
as through discussions with forensic professionals and overseas specialists.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee we were appointed by the Company on 24 April 2025 to
audit the financial statements for the year ending 31 December 2025 and subsequent financial periods.
• The period of total uninterrupted engagement including previous renewals and reappointments is 1 year, covering
the year end 31 December 2025.
• The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s
members as a body for our audit work, for this report, or for the opinions we have formed.
for and on behalf of Ernst & Young LLP , Statutory Auditor
Reading
5 March 2026
Independent Auditor’s Report continued
To the members of Serco Group plc
Serco Group plc | Annual Report and Accounts 2025 | 149
| Non- | Non- | ||||||
| underlying | underlying | ||||||
| Underlying | items | Reported | Underlying | items | Reported | ||
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | ||
For the year ended 31 December | Note | £m | £m | £m | £m | £m | £m |
Revenue | 7 | ||||||
Cost of sales | ( | ( | ( | ( | |||
Gross profit | |||||||
Administrative expenses | ( | ( | ( | ( | |||
Exceptional item - Goodwill impairment | 8 | ( | ( | ||||
Profit on disposal of a subsidiary | 8 | ||||||
| Amortisation and impairment of intangibles | 8 | ( | ( | ( | ( | ||
| arising on acquisition | |||||||
Share of results of joint ventures and associates, net of interest and tax | 5 | ||||||
Operating profit/(loss) | 9 | ( | ( | ||||
Investment revenue | 11 | ||||||
Finance costs | 12 | ( | ( | ( | ( | ||
Net finance costs | ( | ( | ( | ( | |||
Profit/(loss) before tax | ( | ( | |||||
Total tax (charge)/credit | 13 | ( | ( | ( | ( | ( | |
Profit/(loss) for the year | ( | ( | |||||
| Attributable to: | |||||||
Equity owners of the Company | ( | ( | |||||
Non-controlling interest | |||||||
| Earnings per share (EPS) | |||||||
Basic EPS | 15 | ||||||
Diluted EPS | 15 |
The accompanying notes on pages 156 to 221 form an integral part of the financial statements.
Consolidated Income Statement
For the year ended 31December 2025
Serco Group plc | Annual Report and Accounts 2025 | 150
2025 | 2024 | ||
Note | £m | £m | |
Profit for the year 1 | |||
| Other comprehensive income/(loss) for the year: | |||
| Items that will not be reclassified subsequently to profit or loss: | |||
Share of other comprehensive income in joint ventures and associates 1 | 5 | ||
Remeasurements of post-employment benefit obligations 2 | 29 | ( | ( |
Income tax relating to components of other comprehensive income that will not be 2 | 13 | ||
reclassified subsequently to profit or loss | |||
| Items that may be reclassified subsequently to profit or loss: | |||
Net exchange loss on translation of foreign operations 3 | ( | ( | |
Net exchange on disposal of foreign operations 3 | ( | ||
Fair value loss/(gain) on cash flow hedges during the year 4 | ( | ||
Tax relating to hedging that may be reclassified 4 | 13 | ( | |
Total other comprehensive loss for the year | ( | ( | |
Total comprehensive income/(loss) for the year | ( | ||
| Attributable to: | |||
Equity owners of the Company | ( | ||
Non-controlling interest |
1. Recorded in retained earnings in the Consolidated Statement of Changes in Equity.
2. Recorded in other reserves in the Consolidated Statement of Changes in Equity and retirement benefit obligations reserve in note 32.
3. Recorded in other reserves in the Consolidated Statement of Changes in Equity and translation reserve in note 32.
4. Recorded in other reserves in the Consolidated Statement of Changes in Equity and hedging reserve in note 32.
The accompanying notes on pages 156 to 221 form an integral part of the financial statements.
Consolidated Statement of Comprehensive Income
For the year ended 31December 2025
Serco Group plc | Annual Report and Accounts 2025 | 151
| Total | ||||||
| Share premium | Retained | shareholders’ | Non-controlling | |||
| Share capital | account | earnings | Other reserves 1 | equity | interest | |
£m | £m | £m | £m | £m | £m | |
At 1 January 2024 | ( | ( | ||||
| Total comprehensive income/(loss) | ||||||
for the year | ( | ( | ||||
Dividends paid | ( | ( | ||||
Shares purchased and held in own share reserve | ( | ( | ||||
Shares purchased and held in Treasury until cancelled | ( | ( | ||||
Cancellation of shares held in Treasury | ( | ( | ||||
| Shares transferred to award holders | ||||||
on exercise of share awards | ||||||
| Expense in relation to share-based | ||||||
payments | ||||||
Tax credit on items taken directly to equity | ||||||
At | ( | |||||
| Total comprehensive income/(loss) | ||||||
for the year | ( | |||||
Dividends paid | ( | ( | ||||
Shares purchased and held in own share reserve | ( | ( | ||||
| Shares committed to be purchased | ||||||
and held in own share reserve | ( | ( | ||||
Shares purchased and held in Treasury until cancelled | ( | ( | ||||
Cancellation of shares held in Treasury | ( | ( | ||||
| Shares transferred to award holders | ||||||
on exercise of share awards | ||||||
| Expense in relation to share-based | ||||||
payments | ||||||
Tax credit on items taken directly to equity | ||||||
At | ( |
1. An analysis of other reserves is presented as part of note 32 Reserves.
The accompanying notes on pages 156 to 221 form an integral part of the financial statements.
Consolidated Statement ofChanges in Equity
For the year ended 31December 2025
Serco Group plc | Annual Report and Accounts 2025 | 152
At 31 December | At 31 December | ||
2025 | 2024 | ||
Notes | £m | £m | |
| Non-current assets | |||
Goodwill | 16 | ||
Other intangible assets | 17 | ||
Property, plant and equipment | 18 | ||
Right of use assets | 18 | ||
Interests in joint ventures and associates | 5 | ||
Contract assets | 20 | ||
Trade and other receivables | 20 | ||
Derivative financial instruments | 28 | ||
Deferred tax assets | 14 | ||
Retirement benefit assets | 29 | ||
| Current assets | |||
Inventories | 19 | ||
Contract assets | 20 | ||
Trade and other receivables | 20 | ||
Current tax assets | |||
Cash and cash equivalents | 21 | ||
Derivative financial instruments | 28 | ||
Total assets | |||
| Current liabilities | |||
Contract liabilities | 22 | ( | ( |
Trade and other payables | 22 | ( | ( |
Derivative financial instruments | 28 | ( | ( |
Current tax liabilities | ( | ( | |
Provisions | 25 | ( | ( |
Obligations under leases | 23 | ( | ( |
Loans | 24 | ( | |
( | ( | ||
| Non-current liabilities | |||
Contract liabilities | 22 | ( | ( |
Trade and other payables | 22 | ( | ( |
Derivative financial instruments | 28 | ( | ( |
Deferred tax liabilities | 14 | ( | ( |
Provisions | 25 | ( | ( |
Obligations under leases | 23 | ( | ( |
Loans | 24 | ( | ( |
Retirement benefit obligations | 29 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets |
Consolidated Balance Sheet
For the year ended 31December 2025
Serco Group plc | Annual Report and Accounts 2025 | 153
At 31 December | At 31 December | ||
2025 | 2024 | ||
Notes | £m | £m | |
| Equity | |||
Share capital | 30 | ||
Share premium account | 31 | ||
Retained earnings | |||
| Other reserves | 32 | ( | ( |
Equity attributable to owners of the Company | |||
Non-controlling interest | |||
Total equity |
The accompanying notes on pages 156 to 221 form an integral part of the financial statements.
Consolidated Balance Sheet continued
Serco Group plc | Annual Report and Accounts 2025 | 154
2025 | 2024 | ||
| Note | £m | £m | |
Net cash inflow from operating activities | 35 | ||
| Investing activities | |||
Interest received | |||
Dividends received from joint ventures and associates | 5 | ||
Loan repaid by joint venture | |||
Purchase of other intangible assets | 17 | ( | ( |
Purchase of property, plant and equipment | 18 | ( | ( |
Proceeds from disposal of property, plant and equipment | |||
Proceeds from disposal of subsidiary, net of cash disposed | 8 | ( | |
Acquisition of subsidiaries, net of cash acquired | 6 | ( | ( |
Other investing activities | |||
Net cash outflow from investing activities | ( | ( | |
| Financing activities | |||
Interest paid | ( | ( | |
Capitalised finance costs paid | ( | ( | |
Advances of loans | 24 | ||
Repayments of loans | 24 | ( | ( |
Capital element of lease repayments | 23 | ( | ( |
Cash movements on finance related derivatives | 12 | ( | ( |
Dividends paid to shareholders | ( | ( | |
| Purchase of own shares for Employee Share Ownership Trust | ( | ( | |
Own shares repurchased | ( | ( | |
Proceeds received from exercise of share options | |||
Net cash outflow from financing activities | ( | ( | |
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at beginning of year | |||
Net exchange loss | 24 | ( | ( |
Cash and cash equivalents at end of year | 21 |
The accompanying notes on pages 156 to 221 form an integral part of the financial statements.
Consolidated Cash Flow Statement
For the year ended 31December 2025
Serco Group plc | Annual Report and Accounts 2025 | 155
1. General information
The address of the registered office is Serco House, 16 Bartley Wood Business Park, Bartley Way, Hook, Hampshire, RG27
The nature of the Group’s operations are set out in the Strategic Report on pages 1 to 134 and the principal activities
are set out in note 4.
A full list of subsidiaries and related undertakings is included in note 52 of the Company financial statements on pages
228 to 230.
Notes to the Consolidated Financial Statements
Serco Group plc | Annual Report and Accounts 2025 | 156
2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 157
2. Material accounting policies continued
Effective dates 1 | |
Annual Improvements to IFRS Accounting Standards (Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 andIAS 7) 2 | 1 January 2026 |
Classification and Measurement of Financial Instrument (Amendments to IFRS 9 and IFRS 7) 2 | 1 January 2026 |
Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7) 2 | 1 January 2026 |
Presentation and Disclosure in Financial Statements (New standard IFRS 18) 3 | 1 January 2027 |
Subsidiaries without Public Accountability: Disclosures (New standard IFRS 19) 2 | 1 January 2027 |
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 162
2. Material accounting policies continued
| The principal annual rates used are: | |
Freehold buildings | 2.5% |
Leasehold improvements | The higher of 10% or the rate produced by the lease term |
Machinery | 15% – 20% |
Vehicles | 10% – 50% |
Furniture | 10% |
Office equipment | 20% – 33% |
Right of use assets | Equally over the lease term from inception or equally over the remainder of the lease |
| term from the date of a reassessment of the lease end date |
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
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2. Material accounting policies continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 168
2. Material accounting policies continued
3. Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the Group’s accounting policies, which are described in note 2, Management has made the
following judgements that have the most significant effect on the amounts recognised in the Consolidated Financial
Statements. As described below, many of these areas of judgement also involve a high level of estimation uncertainty.
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 169
3. Critical accounting judgements and key sources of estimation uncertainty continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 170
3. Critical accounting judgements and key sources of estimation uncertainty continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 171
3. Critical accounting judgements and key sources of estimation uncertainty continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 172
3. Critical accounting judgements and key sources of estimation uncertainty continued
4. Segmental information
Segmental revenue is analysed on an external basis. Inter-segment revenue is not presented as it is not significant in
the context of revenue as a whole. Net finance costs are not presented for each reportable operating segment as they
are reviewed on a consolidated basis by the Group’s Chief Operating Decision Maker (CODM).
Specific corporate expenses are allocated to the corresponding segments. Segment assets comprise goodwill, other
intangible assets, property, plant and equipment including right of use assets, inventories, trade and other
receivables (excluding corporation tax recoverable) and any retirement benefit asset. Segment liabilities comprise
trade and other payables, lease liabilities, provisions and retirement benefit obligations.
The accounting policies of the reportable operating segments are the same as the Group’s accounting policies
described in note 2.
The Group’s operating segments reflecting the information reported to the Board in 2025 under IFRS 8 Operating
Segments are as set out below:
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 173
4. Segmental information continued
Reportable operating segments | Sectors |
UK & Europe | Services for sectors including Citizen Services, Defence, Health & Other Facilities |
| Management, Justice & Immigration and Transport delivered to UK Government, UK | |
| devolved authorities and other public sector customers in the UK & Europe | |
North America | Services for sectors including Citizen Services, Defence and Transport delivered to US |
| federal and civilian agencies, selected state and municipal governments and the | |
| Canadian Government | |
Asia Pacific | Services for sectors including Citizen Services, Defence, Health & Other Facilities |
| Management, Justice & Immigration and Transport in the Asia Pacific region including | |
| Australia, New Zealand and Hong Kong | |
Middle East | Services for sectors including Citizen Services, Defence, Health & Other Facilities |
| Management and Transport in the Middle East region | |
Corporate | Central and head office costs |
UK&E | North America | Asia Pacific | Middle East | Corporate | Total | |
| Year ended 31 December 2025 | £m | £m | £m | £m | £m | £m |
Revenue | 2,582.1 | 1,463.2 | 654.6 | 176.9 | — | 4,876.8 |
| Result | ||||||
Underlying operating profit/(loss) | 148.9 | 143.5 | 24.0 | 12.6 | (57.4) | 271.6 |
| Amortisation and impairment of intangibles | (10.2) | (19.8) | — | — | — | (30.0) |
| arising on acquisition | ||||||
Profit on disposal of subsidiary | — | — | 4.7 | — | — | 4.7 |
Operating profit/(loss) | 138.7 | 123.7 | 28.7 | 12.6 | (57.4) | 246.3 |
Net finance cost | (44.8) | |||||
Profit before tax | 201.5 | |||||
Tax charge | (55.9) | |||||
Tax on exceptional items | — | |||||
Profit for the year | 145.6 | |||||
| Supplementary information | ||||||
Staff costs | 1,167.6 | 618.8 | 450.6 | 38.9 | 35.6 | 2,311.5 |
Share of profits in joint ventures and associates, net of interest and tax | 26.7 | — | — | 2.1 | — | 28.8 |
Total depreciation and impairment of plant, property and equipment and right of use | (154.5) | (22.5) | (7.5) | (1.1) | (0.3) | (185.9) |
| assets | ||||||
Amortisation and impairment of intangible assets | (6.7) | (0.9) | (1.1) | (0.1) | — | (8.8) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 174
4. Segmental information continued
UK&E | North America | Asia Pacific | Middle East | Corporate | Total | |
| Year ended 31 December 2024 | £m | £m | £m | £m | £m | £m |
Revenue | 2,445.9 | 1,326.1 | 799.4 | 215.9 | — | 4,787.3 |
| Result | ||||||
| Underlying operating profit/(loss) | 147.9 | 136.1 | 24.6 | 16.0 | (51.1) | 273.5 |
| Amortisation and impairment of intangibles | ||||||
| arising on acquisition (excluding exceptional | ||||||
items) | (13.4) | (15.5) | — | — | — | (28.9) |
Exceptional item — Goodwill impairment | — | — | (114.5) | — | — | (114.5) |
Operating profit/(loss) | 134.5 | 120.6 | (89.9) | 16.0 | (51.1) | 130.1 |
Net finance cost | (33.1) | |||||
Profit before tax | 97.0 | |||||
Tax charge | (52.5) | |||||
Profit for the year | 44.5 | |||||
| Supplementary information | ||||||
Staff costs | 1,061.2 | 576.7 | 540.9 | 57.0 | 27.5 | 2,263.3 |
Share of profits in joint ventures and associates, net of interest and tax | 22.8 | — | — | — | — | 22.8 |
Total depreciation and impairment of plant, property and equipment and right of use | ||||||
assets | (129.4) | (19.3) | (8.8) | (1.7) | 0.7 | (158.5) |
Amortisation and impairment of intangible assets | (5.7) | (1.1) | (1.4) | (0.2) | — | (8.4) |
UK&E | North America | Asia Pacific | Middle East | Corporate | Total | |
| As at 31 December 2025 | £m | £m | £m | £m | £m | £m |
| Segment assets | ||||||
Interests in joint ventures and associates | 28.9 | — | — | 5.2 | — | 34.1 |
Other segment assets 1 | 1,061.4 | 1,069.2 | 93.5 | 59.5 | 45.8 | 2,329.4 |
Total segment assets | 1,090.3 | 1,069.2 | 93.5 | 64.7 | 45.8 | 2,363.5 |
Unallocated assets 2 | 432.5 | |||||
Consolidated total assets | 2,796.0 | |||||
| Segment liabilities | ||||||
Segment liabilities | (948.1) | (190.9) | (178.6) | (48.4) | (87.3) | (1,453.3) |
Unallocated liabilities 2 | (469.1) | |||||
Consolidated total liabilities | (1,922.4) | |||||
| Supplementary information | ||||||
Additions to non-current assets 3 | 147.9 | 254.5 | 6.1 | 2.6 | 0.1 | 411.2 |
Segment non-current assets | 784.1 | 854.4 | 27.3 | 24.1 | 10.5 | 1,700.4 |
Unallocated non-current assets | 208.8 |
1. The Corporate segment assets and liabilities include balance sheet items which provide benefit to the wider Group, including defined benefit pension schemes.
2. Unallocated assets and liabilities include deferred tax, cash and cash equivalents, derivative financial instruments and loans.
3. Additions to non-current assets reflects additions and amounts arising on acquisition for goodwill, other intangible assets, property plant and equipment and
right of use assets.
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 175
4. Segmental information continued
UK&E | North America | Asia Pacific | Middle East | Corporate | Total | |
| As at 31 December 2024 | £m | £m | £m | £m | £m | £m |
| Segment assets | ||||||
Interests in joint ventures and associates 4 | 24.7 | — | — | 0.4 | — | 25.1 |
Other segment assets 1 | 1,052.2 | 886.7 | 136.1 | 68.6 | 52.7 | 2,196.3 |
Total segment assets | 1,076.9 | 886.7 | 136.1 | 69.0 | 52.7 | 2,221.4 |
Unallocated assets 2 | 438.9 | |||||
Consolidated total assets | 2,660.3 | |||||
| Segment liabilities | ||||||
Segment liabilities | (921.9) | (169.6) | (213.6) | (61.6) | (79.4) | (1,446.1) |
Unallocated liabilities 2 | (371.7) | |||||
Consolidated total liabilities | (1,817.8) | |||||
| Supplementary information | ||||||
Additions to non-current assets 3 | 280.6 | 22.5 | 9.3 | 11.4 | 0.2 | 324.0 |
Segment non-current assets 5 | 824.2 | 686.5 | 32.4 | 22.8 | — | 1,565.9 |
Unallocated non-current assets | 230.2 |
1. The Corporate segment assets and liabilities include balance sheet items which provide benefit to the wider Group, including defined benefit pension
schemes and corporate intangible assets.
2. Unallocated assets and liabilities include deferred tax, cash and cash equivalents, derivative financial instruments and loans.
3. Additions to non-current assets reflects additions and amounts arising on acquisition for goodwill, other intangible assets, property plant and equipment and
right of use assets.
4. An adjustment has been made to the interest in joint ventures and associates within the UK&E segment as at 31 December 2024. The amount previously
disclosed in this note of £27.7m did not reflect the amount correctly recorded in the Balance Sheet of £24.7m.
5. An adjustment has been made to the segment non-current assets as at 31 December 2024. The amount previously disclosed in this note of £826.8m on the
UK&E segment and £1,568.5m on the total segment did not reflect the amount correctly recorded to ensure the total was equal to the Balance Sheet.
| 2025 | 2024 | |
| Name of entity | £m | £m |
Merseyrail Services Holding Company Limited (Merseyrail) - 50% ownership interest 1 | 13.2 | 9.7 |
VIVO Defence Services Limited (VIVO) - 50% ownership interest 2 | 15.7 | 14.9 |
Other joint ventures and associates 3 | 5.2 | 0.5 |
34.1 | 25.1 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 176
5. Joint ventures and associates continued
2025 | 2024 | |
£m | £m | |
Investments in joint ventures and associates - At 1 January | 25.1 | 32.1 |
Addition 1 | 2.4 | 0.2 |
| Share of profit from continuing operations | ||
Merseyrail | 11.5 | 10.9 |
Vivo | 15.0 | 11.9 |
Other joint ventures and associates | 2.3 | — |
Total share of profit from continuing operations | 28.8 | 22.8 |
| Share of other comprehensive income | ||
Merseyrail | 0.7 | 0.7 |
Total share of other comprehensive income | 0.7 | 0.7 |
| Dividends | ||
Merseyrail | (8.5) | (14.1) |
Vivo | (14.2) | (16.7) |
Other joint ventures and associates | (0.2) | — |
Total dividends | (22.9) | (30.8) |
Foreign Exchange | — | 0.1 |
Investments in joint ventures and associates - At 31 December | 34.1 | 25.1 |
VIVO | Merseyrail | VIVO | Merseyrail | |
2025 | 2025 | 2024 | 2024 | |
Summarised balance sheet (100%) | £m | £m | £m | £m |
Non-current assets | 8.2 | 40.8 | 13.0 | 53.9 |
| Current assets | ||||
Cash and cash equivalents | 61.3 | 57.0 | 46.9 | 52.4 |
Other current assets | 152.9 | 40.7 | 166.0 | 28.2 |
Total current assets | 214.2 | 97.7 | 212.9 | 80.6 |
| Current liabilities | ||||
| Current financial liabilities (excluding trade payables | ||||
and provisions) | (8.5) | (28.0) | (14.3) | (25.4) |
Other current liabilities | (173.1) | (61.2) | (159.5) | (53.6) |
Total current liabilities | (181.6) | (89.2) | (173.8) | (79.0) |
| Non-current financial liabilities (excluding trade payables | ||||
and provisions) | (8.4) | (22.6) | (16.3) | (36.0) |
Other non-current liabilities | — | (0.2) | (0.1) | (0.2) |
Total non-current liabilities | (8.4) | (22.8) | (16.4) | (36.2) |
Net assets | 32.4 | 26.5 | 35.7 | 19.3 |
Carrying amount of investment | 15.7 | 13.2 | 14.9 | 9.7 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 177
5. Joint ventures and associates continued
VIVO | Merseyrail | VIVO | Merseyrail | |
2025 | 2025 | 2024 | 2024 | |
Summarised income statement (100%) | £m | £m | £m | £m |
Revenue | 822.8 | 227.9 | 917.8 | 215.0 |
Operating profit | 41.7 | 31.7 | 47.0 | 29.6 |
Net finance income/(cost) | 1.5 | (0.7) | 0.5 | (0.9) |
Tax charge | (10.8) | (8.0) | (11.8) | (6.9) |
Profit from operations | 32.4 | 23.0 | 35.7 | 21.8 |
Other comprehensive income | 0.0 | 1.4 | 0.0 | 1.4 |
Total comprehensive income | 32.4 | 24.4 | 35.7 | 23.2 |
VIVO | Merseyrail | Others | Total | VIVO | Merseyrail | Others | Total | |
2025 | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 | 2024 | |
Summarised income statement (Group proportion) | £m | £m | £m | £m | £m | £m | £m | £m |
Revenue | 370.6 | 114.0 | 30.1 | 514.7 | 395.1 | 107.5 | 1.9 | 504.5 |
Operating profit | 19.2 | 15.8 | 2.5 | 37.5 | 15.8 | 14.8 | — | 30.6 |
Net finance income/(cost) | 0.8 | (0.3) | — | 0.5 | 0.3 | (0.4) | — | (0.1) |
Tax charge | (5.0) | (4.0) | (0.2) | (9.2) | (4.2) | (3.5) | — | (7.7) |
Profit from operations | 15.0 | 11.5 | 2.3 | 28.8 | 11.9 | 10.9 | — | 22.8 |
Other comprehensive income | — | 0.7 | — | 0.7 | — | 0.7 | — | 0.7 |
Total comprehensive income | 15.0 | 12.2 | 2.3 | 29.5 | 11.9 | 11.6 | — | 23.5 |
| 2025 | |
| £m | |
MT&S – Enterprise value 1 | 241.6 |
| MT&S – Provisional working capital and completion account finalisation | 3.7 |
| MT&S – Acquisition date fair value of consideration transferred | 245.3 |
| Climatize – Contingent consideration on acquisition | 2.5 |
| Acquisition of business, net of cash acquired | 247.8 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 178
6. Acquisitions continued
| MT&S | |
| £m | |
Other intangible assets 1 | 89.3 |
| Property, plant and equipment | 2.2 |
Right of use assets 2 | 6.4 |
| Deferred tax asset | 0.3 |
Contract assets, trade and other receivables 3 | 20.4 |
| Contract liabilities, trade and other payables | (6.5) |
| Provisions | (1.2) |
Lease obligations 2 | (6.4) |
Net assets acquired 4 | 104.5 |
Goodwill 5 | 140.8 |
| Acquisition date fair value of consideration transferred | 245.3 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 179
UK&E | North America | Asia Pacific | Middle East | Total | |
| Year ended 31 December 2025 | £m | £m | £m | £m | £m |
| Key sectors | |||||
Defence | 426.9 | 1,084.4 | 183.0 | 31.9 | 1,726.2 |
Justice & Immigration | 1,400.1 | — | 189.1 | — | 1,589.2 |
Transport | 124.3 | 67.5 | 20.0 | 67.2 | 279.0 |
Health & Other Facilities Management | 229.3 | — | 149.7 | 54.6 | 433.6 |
Citizen Services | 401.5 | 311.3 | 112.8 | 23.2 | 848.8 |
2,582.1 | 1,463.2 | 654.6 | 176.9 | 4,876.8 | |
| Timing of revenue recognition | |||||
| Revenue recognised from performance obligations | |||||
satisfied in previous periods | 5.6 | — | 0.3 | — | 5.9 |
Revenue recognised at a point in time | 19.2 | — | 0.1 | — | 19.3 |
Products and services transferred over time | 2,557.3 | 1,463.2 | 654.2 | 176.9 | 4,851.6 |
2,582.1 | 1,463.2 | 654.6 | 176.9 | 4,876.8 |
UK&E | North America | Asia Pacific | Middle East | Total | |
| Year ended 31 December 2024 | £m | £m | £m | £m | £m |
| Key sectors | |||||
Defence | 358.2 | 932.5 | 181.4 | 26.3 | 1,498.4 |
Justice & Immigration | 1,409.2 | — | 323.1 | — | 1,732.3 |
Transport | 130.7 | 85.3 | 16.6 | 82.4 | 315.0 |
Health & Other Facilities Management | 217.1 | — | 160.2 | 83.7 | 461.0 |
Citizen Services | 330.7 | 308.3 | 118.1 | 23.5 | 780.6 |
2,445.9 | 1,326.1 | 799.4 | 215.9 | 4,787.3 | |
| Timing of revenue recognition | |||||
| Revenue recognised from performance obligations | |||||
satisfied in previous periods | 4.8 | — | — | — | 4.8 |
Revenue recognised at a point in time | 48.0 | — | 12.3 | — | 60.3 |
Products and services transferred over time | 2,393.1 | 1,326.1 | 787.1 | 215.9 | 4,722.2 |
2,445.9 | 1,326.1 | 799.4 | 215.9 | 4,787.3 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 180
7. Revenue from contracts with customers continued
UK&E | North America 1 | Asia Pacific | Middle East | Total | |
£m | £m | £m | £m | £m | |
Within 1 year (2026) | 2,392.1 | 815.0 | 456.1 | 90.7 | 3,753.9 |
Between 2-5 years (2027-2030) | 5,363.6 | 345.9 | 687.4 | 205.7 | 6,602.6 |
5 years and beyond (2031+) | 3,197.3 | 28.1 | 890.8 | 4.3 | 4,120.5 |
10,953.0 | 1,189.0 | 2,034.3 | 300.7 | 14,477.0 |
8. Non-underlying items
2025 | 2024 | |
Year ended 31 December | £m | £m |
Exceptional item — Goodwill impairment | — | (114.5) |
Amortisation of customer relationship intangibles | (28.9) | (26.9) |
Impairment of customer relationship intangibles | (1.1) | (2.0) |
Amortisation and impairment of intangible assets arising on acquisition | (30.0) | (28.9) |
Profit on disposal of subsidiary | 4.7 | — |
Total non-underlying items before tax | (25.3) | (143.4) |
Non-underlying tax (charge)/credit 1 | (4.3) | 7.9 |
Total non-underlying items net of tax | (29.6) | (135.5) |
1. The non-underlying tax charge includes £17.3m relating to the derecognition of part of the deferred tax asset in Australia, for more details see page 171.
During the year the Group disposed of Serco Group (HK) Limited and reduced its shareholding in Khadamat Facilities
Management LLC (Khadamat) from 49% to 45%, resulting in Khadamat no longer being proportionally consolidated.
The total impact of disposals to the Group’s cash flow position in the year was as follows:
Hong Kong Khadamat Total
Year ended 31 December 2025 £m £m £m
Consideration
9.4 2.4 11.8
Less: cash disposed
(6.4) (5.9) (12.3)
Less: non-cash consideration
1
— (2.4) (2.4)
Proceeds from disposal of subsidiary, net of cash disposed and disposal costs
3.0 (5.9) (2.9)
1. The non-cash consideration for Khadamat reflects that no cash was transferred for either the disposal or the addition to investment in joint ventures and
associates shown in Note 5.
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 181
8. Non-underlying items continued
Below is a reconciliation of the net assets disposed to profit on disposal of subsidiaries
Hong Kong | Khadamat | Total | |
Year ended 31 December 2025 | £m | £m | £m |
| Property, plant and equipment | (0.8) | (0.1) | (0.9) |
| Right of use assets | (0.2) | — | (0.2) |
| Inventories | — | (0.3) | (0.3) |
| Contract assets, trade and other receivables | (5.0) | (5.9) | (10.9) |
| Cash and cash equivalents | (6.4) | (5.9) | (12.3) |
| Contract liabilities, trade and other payables | 6.8 | 8.8 | 15.6 |
| Provisions | 3.7 | 0.5 | 4.2 |
| Corporation tax liabilities | — | 0.5 | 0.5 |
| Net assets disposed | (1.9) | (2.4) | (4.3) |
| Consideration | 9.4 | 2.4 | 11.8 |
| Foreign exchange loss from translation reserve | (0.5) | — | (0.5) |
| Cost of disposal | (2.3) | — | (2.3) |
| Profit on disposal of subsidiary | 4.7 | — | 4.7 |
2025 | 2024 | |
Year ended 31 December | £m | £m |
Research and development costs | 0.1 | 0.1 |
Profit on disposal of property, plant and equipment | (0.6) | (0.3) |
(Profit)/loss on early termination of leases | (0.6) | 0.1 |
Loss on disposal of intangible assets | — | 0.7 |
Depreciation and impairment of property, plant and equipment (note 18) | 18.5 | 16.8 |
Depreciation and impairment of right of use assets (note 18) | 167.4 | 141.7 |
Impairment of goodwill (note 17) | — | 114.5 |
Amortisation and impairment of intangible assets – arising on acquisition (note 17) | 30.0 | 28.9 |
Amortisation and impairment of intangible assets | 8.8 | 8.3 |
Staff costs (note 10) | 2,325.1 | 2,278.5 |
Allowance for doubtful debts (credited)/charged to income statement | (1.3) | 1.0 |
Net foreign exchange charge | 0.3 | 0.7 |
Movement on non-designated hedges and reclassified cash flow hedges | 0.9 | 0.4 |
Lease payments recognised through operating profit 1 | 2.8 | 3.0 |
Operating lease income from sub-leases | (0.5) | (2.0) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 182
9. Operating profit continued
2025 | 2024 | |
Year ended 31 December | £m | £m |
Fees payable to the Company’s Auditor for the audit of the Company’s annual accounts | 2.9 | 5.4 |
| Fees payable to the Company’s Auditor and their associates for other services to the Group: | ||
– Audit of the Company’s subsidiaries pursuant to legislation | 3.7 | 1.6 |
Total audit fees | 6.6 | 7.0 |
– Audit-related assurance services | 0.4 | 0.6 |
– Other non-audit services | — | — |
Total non-audit fees | 0.4 | 0.6 |
10. Staff costs
The average number of persons employed by the Group (including Executive Directors) was:
2025 | 2024 | |
| Year ended 31 December | Number | Number |
UK & Europe | 26,293 | 24,702 |
North America | 9,395 | 8,681 |
Asia Pacific | 10,650 | 12,825 |
Middle East | 1,204 | 1,453 |
Unallocated 1 | 121 | 128 |
47,789 |
1. Unallocated includes Group overhead functions.
The average number of persons employed includes all individuals employed under contracts of service by the Group.
This comprises permanent, part-time, and casual employees and those with fixed term contracts. It excludes self-
employed contractors and other casual workers.
Aggregate remuneration of all employees based on the average number of employees reported above was:
2025 | 2024 | |
Year ended 31 December | £m | £m |
Wages and salaries | 2,008.9 | 1,987.2 |
Social security costs | 198.1 | 170.5 |
Other pension costs (note 29) | 104.5 | 105.6 |
2,311.5 | 2,263.3 | |
Share-based payment expense (note 33) | 13.6 | 15.2 |
2,325.1 | 2,278.5 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 183
2025 | 2024 | |
Year ended 31 December | £m | £m |
Interest receivable on loans and deposits | 5.7 | 5.3 |
Net interest receivable on retirement benefit obligations (note 29) | 0.8 | 1.9 |
| Movement in discount on other debtors | 0.3 | 0.5 |
6.8 | 7.7 |
2025 | 2024 | |
Year ended 31 December | £m | £m |
Interest payable on lease liabilities | 22.9 | 19.9 |
Interest payable on loans | 23.9 | 14.7 |
Facility fees and other charges | 2.7 | 2.7 |
49.5 | 37.3 | |
Movement in discount on contingent consideration | 0.8 | 0.9 |
Movement in discount on other creditors | 0.4 | 0.5 |
Foreign exchange on financing activities 1 | 0.9 | 2.1 |
51.6 | 40.8 |
13. Tax
13 (a) Income tax recognised in the income statement
| Non-underlying | Non-underlying | |||||
| Underlying | items | Reported | Underlying | items | Reported | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
| Year ended 31 December | £m | £m | £m | £m | £m | £m |
| Current income tax | ||||||
Current income tax charge/(credit) | 45.1 | (7.1) | 38.0 | 53.3 | (4.0) | 49.3 |
Adjustments in respect of prior years | (4.0) | — | (4.0) | 0.4 | — | 0.4 |
Pillar Two taxes 1 | ||||||
Current year charge | 0.3 | — | 0.3 | — | — | — |
Adjustments in respect of prior years | 0.2 | — | 0.2 | — | — | — |
| Deferred tax | ||||||
Current year charge/(credit) | 10.7 | 16.3 | 27.0 | 5.3 | (3.9) | 1.4 |
Adjustments in respect of prior years | (0.7) | (4.9) | (5.6) | 1.4 | — | 1.4 |
51.6 | 4.3 | 55.9 | 60.4 | (7.9) | 52.5 |
1. Pillar Two taxes refer to charges arising under the Organisation for Economic Co-operation and Development framework for a global minimum tax.
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 184
13. Tax continued
The tax expense for the year can be reconciled to the profit in the Consolidated Income Statement as follows:
| Non-underlying | Non-underlying | |||||
| Underlying | items | Reported | Underlying | items | Reported | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
| Year ended 31 December | £m | £m | £m | £m | £m | £m |
Profit before tax | 226.8 | (25.3) | 201.5 | 240.4 | (143.4) | 97.0 |
| Tax calculated at a rate of 25.0% | 56.7 | (6.3) | 50.4 | 60.1 | (35.8) | 24.3 |
| (2024: 25.0%) | ||||||
Non-deductible expenses and non- 1 | 2.3 | (2.5) | (0.2) | 2.1 | 28.6 | 30.7 |
taxable income | ||||||
Unprovided deferred tax | 2.0 | 15.7 | 17.7 | 0.6 | — | 0.6 |
Overseas rate differences | 1.0 | 2.3 | 3.3 | (0.6) | (0.7) | (1.3) |
Adjustments in respect of prior years | (4.7) | (4.9) | (9.6) | 1.4 | — | 1.4 |
| Adjustments in respect of equity | (7.2) | — | (7.2) | (5.7) | — | (5.7) |
| accounted investments | ||||||
Withholding tax | 1.0 | — | 1.0 | 2.5 | — | 2.5 |
Pillar Two taxes | 0.5 | — | 0.5 | — | — | — |
Tax charge/(credit) | 51.6 | 4.3 | 55.9 | 60.4 | (7.9) | 52.5 |
1. Relates to costs that are not allowable for tax deduction and to income that is not subject to taxation under local tax law. This disclosure has been amended in
respect of 2024. Due to the value of each component and their similar nature, the lines for ‘Expenses not deductible for tax purposes’ and ‘Other non-taxable
income’ are now combined. There is no change to the tax charge for 2024.
The corporate income tax expense for the year is based on the UK statutory rate of corporation tax for the period of
25.0% (2024: 25.0%). Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The Group tax charge includes movements in contingencies for tax authority audits and tax exposures in the
jurisdictions in which we operate. Management is required to make an estimate of tax liabilities that may arise as a
consequence of accounting and tax treatments, including the pricing of intercompany services. Where Management
concludes that a tax position is uncertain, a liability is held for estimated probable taxes based on information
currently available. Fluctuations may arise as liabilities build up over an extended period before resolution at a single
point in time. Each potential liability and contingency is revisited on an annual basis and adjusted to reflect any
changes in positions taken by the Company, local tax audits, the expiry of statutes of limitations, and any changes in
the broader tax environment.
13 (b) Income tax recognised in the SOCI
2025 | 2024 | |
Year ended 31 December | £m | £m |
| Current tax | ||
Taken to retirement benefit obligations reserve | 1.6 | 2.4 |
| Deferred tax | ||
Relating to cash flow hedges | (0.2) | 0.1 |
Taken to retirement benefit obligations reserve | 3.6 | 5.3 |
5.0 | 7.8 |
13 (c) Tax on items taken directly to equity
2025 | 2024 | |
Year ended 31 December | £m | £m |
| Current tax | ||
Recorded in share-based payment reserve | 1.2 | 1.1 |
| Deferred tax | ||
Recorded in share-based payment reserve | 3.8 | (0.4) |
5.0 | 0.7 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 185
2025 | 2024 | |
Year ended 31 December | £m | £m |
At 1 January – asset | (177.7) | (184.8) |
Income statement charge | 21.4 | 2.8 |
Items recognised in equity and in other comprehensive income | (7.2) | (5.0) |
Arising on acquisition | (0.3) | 4.7 |
Exchange differences | (3.3) | 4.6 |
At 31 December – asset | (167.1) | (177.7) |
| Temporary | Temporary | Temporary | Share-based | |||||||
| differences | differences | differences | payment and | Retirement | Onerous | Derivative | Other | |||
| on assets/ | on right of | on lease | employee | benefit | contract | financial | Tax | temporary | ||
| intangibles | use assets | liabilities | benefits | schemes | provisions | instruments | losses | differences | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
1 January 2025 | 51.8 | 15.1 | (16.7) | (38.5) | 1.6 | (0.7) | (0.2) | (155.5) | (34.6) | (177.7) |
| (Credited)/charged | ||||||||||
| to income statement | ||||||||||
(note 13a) | (5.0) | (1.6) | 1.6 | 9.9 | (0.1) | (0.4) | — | 4.8 | 12.2 | 21.4 |
Arising on acquisition of a subsidiary | — | 1.6 | (1.6) | — | — | — | — | — | (0.3) | (0.3) |
Items recognised in equity and in other comprehensive income (notes 13b | ||||||||||
and 13c) | — | — | — | (3.8) | (3.6) | — | 0.2 | — | — | (7.2) |
| Exchange | ||||||||||
differences | (4.2) | (0.5) | 0.6 | 0.5 | 0.1 | 0.2 | 0.1 | 0.1 | (0.2) | (3.3) |
| 31 December | ||||||||||
2025 | 42.6 | 14.6 | (16.1) | (31.9) | (2.0) | (0.9) | 0.1 | (150.6) | (22.9) | (167.1) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 186
14. Deferred tax continued
| Temporary | Temporary | Temporary | Share-based | |||||||
| differences | differences | differences | payment and | Retirement | Onerous | Derivative | Other | |||
| on assets/ | on right of | on lease | employee | benefit | contract | financial | Tax | temporary | ||
| intangibles | use assets | liabilities | benefits | schemes | provisions | instruments | losses | differences | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
1 January 2024 | 29.0 | 15.4 | (17.6) | (36.8) | 7.1 | (1.0) | (0.1) | (157.5) | (23.3) | (184.8) |
| IFRS 16 | ||||||||||
Restatement | — | — | — | — | — | — | — | — | — | — |
| At 1 January | ||||||||||
(Restated) | 29.0 | 15.4 | (17.6) | (36.8) | 7.1 | (1.0) | (0.1) | (157.5) | (23.3) | (184.8) |
| (Credited)/charged | ||||||||||
| to income statement | ||||||||||
(note 13a) | (0.6) | (0.1) | 0.7 | (3.4) | (0.2) | 0.3 | — | 2.0 | 4.1 | 2.8 |
Transfer in temporary | ||||||||||
difference | 17.7 | — | — | — | — | — | — | — | (17.7) | — |
Arising on acquisition of a subsidiary | 4.7 | — | — | — | — | — | — | — | — | 4.7 |
Items recognised in equity and in other comprehensive income (notes 13b | ||||||||||
and 13c) | — | — | — | 0.4 | (5.3) | — | (0.1) | — | — | (5.0) |
| Exchange | ||||||||||
differences | 1.0 | (0.2) | 0.2 | 1.3 | — | — | — | — | 2.3 | 4.6 |
| 31 December | ||||||||||
2024 | 51.8 | 15.1 | (16.7) | (38.5) | 1.6 | (0.7) | (0.2) | (155.5) | (34.6) | (177.7) |
2025 | 2024 | |
£ | £ | |
| Deferred tax liabilities | 41.1 | 52.1 |
| Deferred tax assets | (208.2) | (229.8) |
(167.1) | (177.7) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 187
14. Deferred tax continued
15. Earnings per share
Basic earnings per share is calculated by dividing the profit after tax attributable to owners of the Group by the
weighted average number of shares in issue, after deducting treasury shares and the Group’s own shares held by
employee share ownership trusts, and adding back vested share options not exercised.
In calculating the diluted earnings per share, unvested share options outstanding have been taken into account
where the impact of these is dilutive.
The calculation of the basic and diluted EPS is based on the following data:
2025 | 2024 | |
| Number of shares | millions | millions |
Weighted average number of ordinary shares for the purpose of basic EPS | 1,012.2 | 1,058.9 |
Effect of dilutive potential ordinary shares: Shares under award | 22.5 | 19.2 |
Weighted average number of ordinary shares for the purpose of diluted EPS | 1,034.7 | 1,078.1 |
Earnings per share
| Per share | Per share | |||
| Earnings | amount | Earnings | amount | |
2025 | 2025 | 2024 | 2024 | |
Basic EPS | £m | pence | £m | pence |
Earnings for the purpose of basic EPS | 145.6 | 14.38 | 44.2 | 4.17 |
Effect of dilutive potential ordinary shares | — | (0.31) | — | (0.07) |
Diluted EPS | 145.6 | 14.07 | 44.2 | 4.10 |
| Accumulated | |||
| impairment | |||
| Cost | losses | Carrying amount | |
£m | £m | £m | |
1 January 2024 | 1,246.8 | (340.1) | 906.7 |
Arising on acquisitions | 30.9 | — | 30.9 |
Impairment | — | (114.5) | (114.5) |
Exchange differences | 3.1 | — | 3.1 |
At 31 December 2024 | 1,280.8 | (454.6) | 826.2 |
Acquisitions | 140.8 | — | 140.8 |
Exchange differences | (53.6) | 15.9 | (37.7) |
At 31 December 2025 | 1,368.0 | (438.7) | 929.3 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 188
16. Goodwill continued
| Goodwill | Goodwill | Headroom on | Headroom on | |||
| balance | Exchange | balance | impairment | impairment | ||
| 1 January | differences | 31 December | analysis | analysis | ||
2025 | Acquisitions | 2025 | 2025 | 2025 | 2024 | |
£m | £m | £m | £m | £m | £m | |
UK & Europe | 227.0 | — | 1.8 | 228.8 | 1,704.3 | 1,234.8 |
North America | 568.5 | 140.8 | (38.1) | 671.2 | 1,294.6 | 889.2 |
Asia Pacific | 10.3 | — | — | 10.3 | 31.0 | — |
Middle East | 20.4 | — | (1.4) | 19.0 | 218.7 | 327.0 |
826.2 | 140.8 | (37.7) | 929.3 | 3,248.6 | 2,451.0 |
| Terminal | Terminal | |||
| Discount | Discount | growth | growth | |
| rate | rate | rates | rates | |
| % | % | % | % | |
2025 | 2024 | 2025 | 2024 | |
UK & Europe | 9.8 | 10.1 | 2.0 | 2.1 |
North America | 11.0 | 11.1 | 2.4 | 2.3 |
Asia Pacific | 12.3 | 12.1 | 2.1 | 2.2 |
Middle East | 11.1 | 11.4 | 2.6 | 2.5 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 189
16. Goodwill continued
| Sensitivity | Impact |
| 1% increase in discount rates combined with a 1% decrease in terminal growth rates | No impairment |
No growth to cash flows outside the two-year budget period | No impairment |
10% reduction in cash flows in the terminal year 1 | No impairment |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 190
| Acquisition | ||||
related | Other | |||
| Internally | ||||
| generated | ||||
| Customer | development | |||
relationships | Software and IT | expenditure | Total | |
£m | £m | £m | £m | |
| Cost | ||||
At 1 January 2025 | 218.1 | 136.1 | 48.1 | 402.3 |
Arising on acquisition | 89.3 | — | — | 89.3 |
Additions - internal development | — | 2.1 | 1.1 | 3.2 |
Additions - external | — | 8.5 | — | 8.5 |
Reclassifications from/to other intangible asset categories | — | (0.6) | 0.6 | — |
Disposals | — | (46.0) | (0.6) | (46.6) |
Exchange differences | (7.8) | (1.5) | (0.2) | (9.5) |
At 31 December 2025 | 299.6 | 98.6 | 49.0 | 447.2 |
| Accumulated amortisation and impairment | ||||
At 1 January 2025 | 143.5 | 114.4 | 43.0 | 300.9 |
Impairment charge | 1.1 | — | — | 1.1 |
Amortisation charge - internal development | — | 1.4 | 2.0 | 3.4 |
Amortisation charge - external | 28.9 | 5.4 | — | 34.3 |
Disposals | — | (46.0) | (0.6) | (46.6) |
Exchange differences | (6.0) | (1.8) | (0.3) | (8.1) |
At 31 December 2025 | 167.5 | 73.4 | 44.1 | 285.0 |
| Net book value | ||||
At 31 December 2025 | 132.1 | 25.2 | 4.9 | 162.2 |
| Acquisition | ||||
related | Other | |||
| Internally | ||||
| generated | ||||
| Customer | development | |||
relationships | Software | expenditure | Total | |
£m | £m | £m | £m | |
| Cost | ||||
At 1 January 2024 | 202.8 | 132.8 | 57.6 | 393.2 |
Arising on acquisition | 15.4 | 0.1 | — | 15.5 |
Additions - internal development | — | 1.8 | 1.9 | 3.7 |
Additions - external | — | 5.4 | — | 5.4 |
Disposals | (0.4) | (2.3) | (11.4) | (14.1) |
Exchange differences | 0.3 | (1.7) | — | (1.4) |
At 31 December 2024 | 218.1 | 136.1 | 48.1 | 402.3 |
| Accumulated amortisation and impairment | ||||
At 1 January 2024 | 114.2 | 110.2 | 53.2 | 277.6 |
Impairment charge | 2.0 | — | — | 2.0 |
Amortisation charge - internal development | — | 2.6 | 1.2 | 3.8 |
Amortisation charge - external | 26.9 | 4.5 | — | 31.4 |
Disposals | (0.4) | (1.6) | (11.4) | (13.4) |
Exchange differences | 0.8 | (1.3) | — | (0.5) |
At 31 December 2024 | 143.5 | 114.4 | 43.0 | 300.9 |
| Net book value | ||||
At 31 December 2024 | 74.6 | 21.7 | 5.1 | 101.4 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 191
| Leasehold | ||||||
| Land & Buildings | Land & Buildings | Improvements | Other Assets | Other Assets | ||
| Owned | Leased | Owned | Owned 1 | Leased 1 | Total | |
£m | £m | £m | £m | £m | £m | |
| Cost | ||||||
At 1 January 2025 | 7.3 | 891.1 | 36.5 | 137.1 | 87.0 | 1,159.0 |
Arising on acquisition | — | 6.4 | 1.8 | 0.4 | — | 8.6 |
Eliminated on disposal | — | (1.0) | — | (2.7) | — | (3.7) |
Impairment | — | — | — | (0.1) | — | (0.1) |
Additions | 1.8 | 116.8 | 3.3 | 16.4 | 23.0 | 161.3 |
Reclassifications between categories | — | — | 0.5 | (0.5) | — | — |
Disposals | (1.5) | (72.7) | (3.8) | (13.3) | (19.3) | (110.6) |
Exchange differences | 0.3 | (1.9) | (1.3) | (2.1) | (0.3) | (5.3) |
At 31 December 2025 | 7.9 | 938.7 | 37.0 | 135.2 | 90.4 | 1,209.2 |
| Accumulated depreciation | ||||||
| and impairment | ||||||
At 1 January 2025 | 3.0 | 414.8 | 24.1 | 97.0 | 48.4 | 587.3 |
Eliminated on disposal | — | (0.8) | — | (1.8) | — | (2.6) |
Charge for the year - impairment | — | 2.1 | — | — | — | 2.1 |
Charge for the year - depreciation | 0.4 | 147.4 | 4.2 | 13.9 | 17.9 | 183.8 |
Reclassifications between categories | — | — | 0.4 | (0.4) | — | — |
Disposals | (1.0) | (65.8) | (3.8) | (9.6) | (16.5) | (96.7) |
Exchange differences | 0.1 | (0.8) | (1.1) | (1.5) | (0.4) | (3.7) |
At 31 December 2025 | 2.5 | 496.9 | 23.8 | 97.6 | 49.4 | 670.2 |
Net book value 2 | ||||||
At 31 December 2025 | 5.4 | 441.8 | 13.2 | 37.6 | 41.0 | 539.0 |
| Leasehold | ||||||
| Land & Buildings | Land & Buildings | Improvements | Other Assets | Other Assets | ||
| Owned | Leased | Owned | Owned 1 | Leased 1 | Total | |
£m | £m | £m | £m | £m | £m | |
| Cost | ||||||
1 January 2024 | 4.1 | 737.1 | 35.9 | 132.1 | 87.1 | 996.3 |
Arising on acquisition | 3.8 | 1.5 | — | 1.9 | 0.2 | 7.4 |
Additions | 0.1 | 207.7 | 5.0 | 20.2 | 27.6 | 260.6 |
Reclassifications between categories | (0.5) | — | 0.5 | — | — | — |
Disposals | (0.1) | (52.6) | (4.6) | (15.0) | (27.6) | (99.9) |
Exchange differences | (0.1) | (2.6) | (0.3) | (2.1) | (0.3) | (5.4) |
At 31 December 2024 | 7.3 | 891.1 | 36.5 | 137.1 | 87.0 | 1,159.0 |
| Accumulated depreciation | ||||||
| and impairment | ||||||
1 January 2024 | 2.9 | 333.8 | 25.0 | 99.9 | 49.5 | 511.1 |
Charge for the year - impairment | — | 0.2 | — | (0.4) | — | (0.2) |
Charge for the year - depreciation | 0.3 | 123.9 | 3.7 | 13.2 | 17.6 | 158.7 |
Disposals | (0.2) | (41.7) | (4.4) | (14.2) | (18.6) | (79.1) |
Exchange differences | — | (1.4) | (0.2) | (1.5) | (0.1) | (3.2) |
At 31 December 2024 | 3.0 | 414.8 | 24.1 | 97.0 | 48.4 | 587.3 |
Net book value 2 | ||||||
At 31 December 2024 | 4.3 | 476.3 | 12.4 | 40.1 | 38.6 | 571.7 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 192
19. Inventories
2025 | 2024 | |
£m | £m | |
Service spares, supplies, consumables and work in progress | 20.0 | 24.1 |
2025 | 2024 | |
Contract assets: Non-current | £m | £m |
Capitalised mobilisation and phase-in costs | 4.5 | — |
2025 | 2024 | |
Contract assets: Current | £m | £m |
Accrued income and other unbilled receivables | 300.7 | 289.0 |
Capitalised bid costs | 1.5 | 1.8 |
Capitalised mobilisation and phase-in costs | 9.6 | 7.7 |
Other contract assets | 1.2 | 1.5 |
313.0 | 300.0 |
2025 | 2024 | |
Capitalised other contract assets, bid and phase-in costs | £m | £m |
At 1 January | 11.0 | 9.0 |
Additions | 7.7 | 4.2 |
Amortisation | (2.3) | (2.0) |
Reclassification | 0.4 | — |
Exchange differences | — | (0.2) |
At 31 December | 16.8 | 11.0 |
2025 | 2024 | |
Trade and other receivables: Non-current | £m | £m |
Prepayments | 2.3 | 5.0 |
Long-term employee compensation plan receivable 1 | 14.8 | 14.9 |
Other receivables | 4.6 | 6.4 |
21.7 | 26.3 |
2025 | 2024 | |
Trade and other receivables: Current | £m | £m |
Trade receivables | 209.9 | 228.2 |
Prepayments | 75.2 | 55.0 |
Amounts owed by joint ventures and associates | 1.1 | — |
Other receivables | 41.5 | 48.3 |
Insurance receivables | 2.4 | — |
330.1 | 331.5 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 193
20. Contract assets, trade and other receivables continued
2025 | 2024 | |
Ageing of trade receivables | £m | £m |
Not due | 166.7 | 183.4 |
Overdue by less than 30 days | 20.9 | 29.2 |
Overdue by between 30 and 60 days | 9.9 | 8.4 |
Overdue by more than 60 days | 15.9 | 12.0 |
Allowance for doubtful debts | (3.5) | (4.8) |
209.9 | 228.2 |
2025 | 2024 | |
Movements on the Group allowance for doubtful debts | £m | £m |
At 1 January | 4.8 | 2.8 |
Arising on acquisition | — | 1.5 |
Net (releases)/charges to income statement | (1.3) | 1.0 |
Utilised | — | (0.1) |
Exchange differences | — | (0.4) |
At 31 December | 3.5 | 4.8 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 194
Sterling | Other currencies | Total | Sterling | Other currencies | Total | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | £m | |
Total cash and cash equivalents | 120.6 | 78.7 | 199.3 | 102.5 | 80.5 | 183.0 |
2025 | 2024 | |
Contract liabilities: Current | £m | £m |
Deferred income | 87.1 | 37.5 |
2025 | 2024 | |
| Contract liabilities: Non-current | £m | £m |
Deferred income | 84.6 | 60.7 |
2025 | 2024 | |
Trade and other payables: Current | £m | £m |
Trade payables | 97.8 | 92.3 |
Contingent consideration payable | 2.7 | 3.2 |
Amounts owed to joint ventures | 0.2 | 0.2 |
Long-term employee compensation plan payable 1 | 3.9 | 6.7 |
Other payables 1 | 153.9 | 154.6 |
Accruals | 304.1 | 338.0 |
562.6 | 595.0 |
2025 | 2024 | |
Trade and other payables: Non-current | £m | £m |
Contingent consideration payable | 4.4 | 6.2 |
Long-term employee compensation plan payable 1 | 9.6 | 8.8 |
Other payables 1 | 3.7 | 6.5 |
17.7 | 21.5 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 195
23. Leases
Management estimates that the fair value of the Group’s lease obligations approximates their carrying amount.
The Group uses leases in the delivery of its contractual obligations and the services required to support the delivery
of those contracts, including administrative functions. There are no material future cash outflows relating to leases in
place as at 31 December 2025 that are not reflected in the minimum lease payments disclosed below and the Group
does not have any leases to which it is contracted but which are not yet reflected in the minimum lease payments.
Additionally, the Group does not have any material leases where payments are variable. Included in amounts payable
under leases below are only those amounts which reflect. Management’s view of the reasonably certain lease term in
line with current operational requirements which are linked to the underlying contract with the customer. There are
no material lease payments which would remain once an underlying contract ends as these contracts could either be
novated to the new provider or terminated.
The total cash outflow for leases, excluding short-term leases and low-value leases, in the year was £181.8m (2024:
£157.3m). This is presented in the Consolidated Cash Flow Statement as £158.9m (2024: £137.4m) relating to the capital
element of the lease liability payments, with the remaining balance of £22.9m (2024: £19.9m) presented within interest paid.
| Minimum lease | Minimum lease | |
| payments | payments | |
2025 | 2024 | |
Amounts payable under leases | £m | £m |
Within one year | 173.5 | 177.8 |
Between one and five years | 300.1 | 306.8 |
After five years | 52.8 | 75.3 |
Total undiscounted lease payments | 526.4 | 559.9 |
Less: future finance charges | (22.0) | (29.9) |
Present value of lease obligations | 504.4 | 530.0 |
Less: amount due for settlement within one year (shown under current liabilities) | (167.1) | (168.3) |
Amount due for settlement after one year | 337.3 | 361.7 |
The following amounts are included in the Group’s Consolidated Financial Statements in respect of its leases:
2025 | 2024 | ||
Note | £m | £m | |
Additions to right of use assets | 18 | 139.8 | 235.3 |
Depreciation charge on right of use assets | 18 | (165.3) | (141.5) |
Net impairment on right of use assets | 18 | (2.1) | (0.2) |
Net disposal of right of use assets | 18 | (9.7) | (19.9) |
Net exchange differences on right of use assets | 18 | (1.0) | (1.4) |
Carrying amount of right of use assets | 18 | 482.8 | 514.9 |
Current lease liabilities | 23 | 167.1 | 168.3 |
Non-current lease liabilities | 23 | 337.3 | 361.7 |
Capital element of lease repayments | (158.9) | (137.4) | |
Interest expense on lease liabilities | 12 | (22.9) | (19.9) |
Profit/(loss) on early termination of leases | 9 | 0.6 | (0.1) |
Expenses relating to short term or low value leases | 9 | (2.8) | (3.0) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 196
Total | Total | |
2025 | 2024 | |
£m | £m | |
| Loans are repayable as follows: | ||
On demand or within one year | — | 38.8 |
Between one and two years | 58.9 | — |
Between two and five years | 82.5 | 122.2 |
After five years | 263.5 | 115.4 |
404.9 | 276.4 | |
Less: amount due for settlement within one year (shown in current liabilities) | — | (38.8) |
Amount due for settlement after one year | 404.9 | 237.6 |
Carrying amount | Fair value | Carrying amount | Fair value | |
2025 | 2025 | 2024 | 2024 | |
£m | £m | £m | £m | |
Loans | 404.9 | 411.4 | 276.4 | 263.2 |
| At 1 January | Exchange | Non-cash | At 31December | |||
2025 | Cash flow 1 | Acquisitions 2 | differences | movements 3 | 2025 | |
£m | £m | £m | £m | £m | £m | |
Loans payable | (276.3) | (156.0) | — | 26.5 | 0.9 | (404.9) |
Lease obligations | (530.0) | 158.9 | (6.4) | 1.6 | (128.5) | (504.4) |
Liabilities arising from financing activities | (806.3) | 2.9 | (6.4) | 28.1 | (127.6) | (909.3) |
Cash and cash equivalents | 183.0 | 19.8 | — | (3.5) | — | 199.3 |
Derivatives relating to net debt | (6.5) | — | — | 6.4 | — | (0.1) |
Net debt | (629.8) | 22.7 | (6.4) | 31.0 | (127.6) | (710.1) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 197
24. Loans continued
| At 1 January | Exchange | Non-cash | At 31 December | |||
2024 | Cash flow | Acquisitions 1 | differences | movements 2 | 2024 | |
£m | £m | £m | £m | £m | £m | |
Loans payable | (206.2) | (65.4) | — | (4.8) | 0.1 | (276.3) |
Lease obligations | (453.7) | 137.4 | (1.5) | 1.5 | (213.7) | (530.0) |
| Liabilities arising from financing activities | (659.9) | 72.0 | (1.5) | (3.3) | (213.6) | (806.3) |
Cash and cash equivalents | 94.4 | 89.7 | — | (1.1) | — | 183.0 |
Derivatives relating to net debt | 3.1 | — | — | (9.6) | — | (6.5) |
Net debt | (562.4) | 161.7 | (1.5) | (14.0) | (213.6) | (629.8) |
| Employee | ||||||
related | Property | Contract | Claims | Other | Total | |
£m | £m | £m | £m | £m | £m | |
At 1 January 2025 | 79.8 | 19.8 | 19.8 | 25.5 | 45.4 | 190.3 |
Arising on acquisition | — | — | 0.2 | — | 1.0 | 1.2 |
Eliminated on disposal | (4.2) | — | — | — | — | (4.2) |
Charge capitalised in right of use assets | — | 0.8 | — | — | — | 0.8 |
Transferred to working capital | — | — | — | — | (1.6) | (1.6) |
| Charge gross insurance provisions | — | — | — | 2.4 | — | 2.4 |
| with a separate reimbursement asset | ||||||
Charged to income statement | 14.5 | 2.5 | 9.1 | 9.0 | 13.1 | 48.2 |
Released to income statement | (0.7) | (0.8) | (0.8) | (4.3) | (5.9) | (12.5) |
Utilised during the year | (19.2) | (1.3) | (3.3) | (5.0) | (7.6) | (36.4) |
Exchange differences | (1.1) | 0.6 | — | — | 1.1 | 0.6 |
At 31 December 2025 | 69.1 | 21.6 | 25.0 | 27.6 | 45.5 | 188.8 |
| Analysed as: | ||||||
Current | 46.5 | 8.3 | 12.2 | 5.9 | 40.1 | 113.0 |
Non-current | 22.6 | 13.3 | 12.8 | 21.7 | 5.4 | 75.8 |
69.1 | 21.6 | 25.0 | 27.6 | 45.5 | 188.8 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 198
25. Provisions continued
2025 | 2024 | |
Capital expenditure contracted but not provided | £m | £m |
Property, plant and equipment | 4.5 | 3.3 |
Intangible assets | — | 0.9 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 199
| Carrying | Comparison | Carrying | Comparison | |
| amount | fair value | amount | fair value | |
£m | £m | £m | £m | |
2025 | 2025 | 2024 | 2024 | |
| Financial assets – non-current | ||||
| Derivatives designated as FVTPL (Level 2) | ||||
Forward foreign exchange contracts | 0.3 | 0.3 | — | — |
| Derivative instruments in designated hedge accounting relationships | ||||
| (Level 2) | ||||
Forward foreign exchange contracts | 0.3 | 0.3 | — | — |
| Financial assets at fair value (Level 2) | ||||
Long-term employee compensation plan 1 | 14.8 | 14.8 | 14.9 | 14.9 |
| Financial assets – current | ||||
Cash and bank balances 2 | 199.3 | 199.3 | 183.0 | 183.0 |
| Derivatives designated as FVTPL (Level 2) | ||||
Forward foreign exchange contracts | 0.3 | 0.3 | 0.8 | 0.8 |
| Derivative instruments in designated hedge accounting relationships | ||||
| (Level 2) | ||||
Forward foreign exchange contracts | 0.2 | 0.2 | — | — |
| Financial assets at amortised cost | ||||
Trade receivables (note 20) 2 | 209.9 | 209.9 | 228.2 | 228.2 |
Amounts owed by joint ventures and associates | 1.1 | 1.1 | — | — |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 200
28. Financial risk management continued
| Carrying | Comparison | Carrying | Comparison | |
| amount | fair value | amount | fair value | |
£m | £m | £m | £m | |
2025 | 2025 | 2024 | 2024 | |
| Financial liabilities – current | ||||
| Derivatives designated as FVTPL (Level 2) | ||||
Forward foreign exchange contracts | (0.2) | (0.2) | (6.4) | (6.4) |
| Derivative instruments in designated hedge accounting relationships | ||||
| (Level 2) | ||||
Forward foreign exchange contracts | (0.1) | (0.1) | (0.2) | (0.2) |
| Financial liabilities at fair value (Level 2) | ||||
Long-term employee compensation plan 1 | (3.9) | (3.9) | (6.7) | (6.7) |
| Financial liabilities at fair value (Level 3) | ||||
Contingent consideration | (2.7) | (2.7) | (3.2) | (3.2) |
Contingent liabilities on acquisition (note 25) | (25.8) | (25.8) | (24.9) | (24.9) |
| Financial liabilities at amortised cost | ||||
Trade payables (note 22) 2 | (97.8) | (97.8) | (92.3) | (92.3) |
Amounts owed to joint ventures | (0.2) | (0.2) | (0.2) | (0.2) |
Loans (note 24) | — | — | (38.8) | (38.0) |
| Financial liabilities – non-current | ||||
| Derivatives designated as FVTPL (Level 2) | ||||
Forward foreign exchange contracts | (0.6) | (0.6) | (0.3) | (0.3) |
| Derivative instruments in designated hedge accounting relationships | ||||
| (Level 2) | ||||
Forward foreign exchange contracts | (0.1) | (0.1) | (0.3) | (0.3) |
| Financial liabilities at fair value (Level 2) | ||||
Long-term employee compensation plan | (9.6) | (9.6) | (8.8) | (8.8) |
| Financial liabilities at fair value (Level 3) | ||||
Contingent consideration | (4.4) | (4.4) | (6.2) | (6.2) |
| Financial liabilities at amortised cost | ||||
Loans (note 24) | (404.9) | (411.4) | (237.6) | (225.2) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 201
28. Financial risk management continued
| Transfer | |||||||
| At | between | At | |||||
| 1January | current and | Unwind of | Cash | Exchange | 31 December | ||
2025 | Acquisitions | non-current | discount | Settlement | differences | 2025 | |
£m | £m | £m | £m | £m | £m | £m | |
| Financial liabilities – current | |||||||
Contingent consideration | (3.2) | — | (2.0) | (0.2) | 2.5 | 0.2 | (2.7) |
Contingent liabilities on acquisition | (24.9) | — | — | — | 0.4 | (1.3) | (25.8) |
| Financial liabilities – non-current | |||||||
Contingent consideration | (6.2) | — | 2.0 | (0.6) | — | 0.4 | (4.4) |
| Transfer | |||||||
| between | At | ||||||
| At 1 January | current and | Unwind of | Cash | Exchange | 31 December | ||
2024 | Acquisitions | non-current | discount | Settlement | differences | 2024 | |
£m | £m | £m | £m | £m | £m | £m | |
| Financial liabilities – current | |||||||
Contingent consideration | — | (2.4) | — | (0.8) | — | — | (3.2) |
Contingent liabilities on acquisition | — | (26.7) | — | — | 1.0 | 0.8 | (24.9) |
| Financial liabilities – non-current | |||||||
Contingent consideration | — | (6.2) | — | (0.1) | — | 0.1 | (6.2) |
Movement in | Movement in | |||
fair value of | fair value of | |||
derivatives | derivatives not | |||
designated in | designated | |||
hedge | in hedge | |||
accounting | accounting | 31 December | ||
| 1 January 2025 | relationships | relationships | 2025 | |
£m | £m | £m | £m | |
Forward foreign exchange contracts | (6.4) | 0.9 | 5.6 | 0.1 |
Movement in | Movement in | |||
fair value of | fair value of | |||
derivatives | derivatives not | |||
designated in | designated | |||
hedge | in hedge | |||
accounting | accounting | 31 December | ||
| 1 January 2024 | relationships | relationships | 2024 | |
£m | £m | £m | £m | |
Forward foreign exchange contracts | 3.0 | (0.4) | (9.0) | (6.4) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 202
28. Financial risk management continued
| Utilised | Total | ||||
| for bonding | facility | ||||
Currency | Amount | Drawn | facility | available | |
2025 | 2025 | 2025 | 2025 | ||
£m | £m | £m | £m | ||
Syndicated revolving credit facility | Sterling | 350.0 | — | — | 350.0 |
| Utilised | Total | ||||
| for bonding | facility | ||||
Currency | Amount | Drawn | facility | available | |
2024 | 2024 | 2024 | 2024 | ||
£m | £m | £m | £m | ||
Syndicated revolving credit facility | Sterling | 350.0 | — | — | 350.0 |
| On demand or | Between one | Between two | After | |||
| within one year | and two years | and five years | five years | Total | ||
At 31 December 2025 | Note | £m | £m | £m | £m | £m |
Trade payables | 22 | 97.8 | — | — | — | 97.8 |
Obligations under leases 1 | 23 | 173.5 | 129.1 | 171.0 | 52.8 | 526.4 |
Loans 2 | 24 | — | 59.4 | 83.2 | 266.0 | 408.6 |
Future loan interest | 23.0 | 22.7 | 56.0 | 38.8 | 140.5 | |
| Derivatives settled on gross basis: | ||||||
Outflow | 447.9 | 15.7 | 25.3 | 1.7 | 490.6 | |
Inflow | (448.1) | (15.8) | (25.2) | (1.6) | (490.7) | |
294.1 | 211.1 | 310.3 | 357.7 | 1,173.2 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 203
28. Financial risk management continued
| On demand or | Between one | Between two | After | |||
| within one year | and two years | and five years | five years | Total | ||
At 31 December 2024 | Note | £m | £m | £m | £m | £m |
Trade payables | 22 | 92.3 | — | — | — | 92.3 |
Obligations under leases 1 | 23 | 177.8 | 129.4 | 177.4 | 75.3 | 559.9 |
Loans 2 | 24 | 39.9 | — | 123.7 | 115.6 | 279.2 |
Future loan interest | 13.4 | 12.3 | 28.8 | 19.3 | 73.8 | |
| Derivatives settled on gross basis: | ||||||
Outflow | 971.5 | 9.5 | 26.7 | 0.9 | 1,008.6 | |
Inflow | (965.8) | (9.4) | (26.2) | (0.8) | (1,002.2) | |
329.1 | 141.8 | 330.4 | 210.3 | 1,011.6 |
2025 | 2024 | |
£m | £m | |
Sterling | (12.7) | 9.4 |
US Dollar | 12.7 | (16.4) |
Indian Rupee | — | 7.0 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 204
28. Financial risk management continued
| Pre-tax profits | Equity gain/ | Pre-tax profits | Equity gain/ | |
| gain/(loss) | (loss) | gain/(loss) | (loss) | |
2025 | 2025 | 2024 | 2024 | |
£m | £m | £m | £m | |
US Dollar | (0.4) | 1.3 | (0.9) | (1.7) |
Euro | (0.3) | — | (0.1) | — |
Indian Rupee | — | — | — | 0.7 |
(0.7) | 1.3 | (1.0) | (1.0) |
| Weighted | Weighted | |||||
| average | average | |||||
Floating rate | Fixed rate | interest rate | Floating rate | Fixed rate | interest rate | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
Financial assets | £m | £m | % | £m | £m | % |
Cash and cash equivalents | 199.3 | — | 3.4 | 183.0 | — | 4.1 |
| Weighted | Weighted | |||||
| average | average | |||||
Floating rate | Fixed rate | interest rate | Floating rate | Fixed rate | interest rate | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
Financial liabilities | £m | £m | % | £m | £m | % |
US Dollar loans | — | 408.6 | 5.4 | — | 279.2 | 4.9 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 205
28. Financial risk management continued
2025 | 2024 | |
£m | £m | |
Cash and cash equivalents | (199.3) | (183.0) |
Loans | 404.9 | 276.4 |
Obligations under leases | 504.4 | 530.0 |
Equity | 873.6 | 842.5 |
Capital | 1,583.6 | 1,465.9 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 206
29. Retirement benefit schemes continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 207
29. Retirement benefit schemes continued
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 208
29. Retirement benefit schemes continued
2025 | 2024 | |
Recognised in the income statement | £m | £m |
Current service cost – employer | 7.5 | 7.1 |
Past service cost – employer | 0.5 | — |
Administrative expenses and taxes | 2.2 | 1.7 |
Recognised in arriving at operating profit | 10.2 | 8.8 |
Interest income on scheme assets – employer | (48.2) | (47.5) |
Interest cost on scheme liabilities – employer | 47.4 | 45.6 |
Finance income | (0.8) | (1.9) |
Total recognised in the income statement | 9.4 | 6.9 |
2025 | 2024 | |
| Included within the SOCI | £m | £m |
Actual return on scheme assets | 7.1 | (60.7) |
Less: interest income on scheme assets | (48.2) | (47.4) |
Net return on scheme assets | (41.1) | (108.1) |
Effect of changes in demographic assumptions | 1.0 | 2.1 |
Effect of changes in financial assumptions | 25.6 | 63.9 |
Effect of experience adjustments | 12.4 | 3.4 |
Total recognised in the SOCI | (2.1) | (38.7) |
| Present value | Present value | |||||
| Fair value of | of scheme | Fair value of | of scheme | |||
| scheme assets | liabilities | Surplus/(deficit) | scheme assets | liabilities | Surplus/(deficit) | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | £m | |
SPLAS 1 | 780.5 | (772.7) | 7.8 | 822.8 | (810.0) | 12.8 |
ORS | 91.4 | (99.2) | (7.8) | 83.2 | (93.9) | (10.7) |
RPS | 57.1 | (55.3) | 1.8 | 58.4 | (57.4) | 1.0 |
Other schemes in surplus | — | — | — | 4.0 | (2.6) | 1.4 |
Other schemes in deficit | 1.2 | (1.5) | (0.3) | 1.1 | (1.6) | (0.5) |
Net retirement benefit asset 2 | 930.2 | (928.7) | 1.5 | 969.5 | (965.5) | 4.0 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 209
29. Retirement benefit schemes continued
2025 | 2024 | |
Scheme assets at fair value | £m | £m |
| Fair value of scheme assets — SPLAS | ||
Buy and maintain credit | — | 17.8 |
Short-dated credit | 36.5 | 31.9 |
Asset backed securities | 60.2 | 38.0 |
LDIs | 188.4 | 181.7 |
Private debt | 136.9 | 143.5 |
Amounts held by insurance companies | 347.6 | 385.8 |
Cash and other | 10.9 | 24.1 |
Fair value of scheme assets — SPLAS | 780.5 | 822.8 |
Pooled investment funds — RPS | 57.1 | 58.4 |
Amounts held by insurance companies — ORS | 91.4 | 83.2 |
Fair value of assets — Other schemes | 1.2 | 5.1 |
Total fair value of scheme assets 1 | 930.2 | 969.5 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 210
29. Retirement benefit schemes continued
| Present value | Present value | |||||
| Fair value of | of scheme | Surplus/ | Fair value of | of scheme | Surplus/ | |
| scheme assets | liabilities | (deficit) | scheme assets | liabilities | (deficit) | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | £m | |
At 1 January | 969.5 | (965.5) | 4.0 | 1,057.1 | (1,032.6) | 24.5 |
Current service cost – employer | — | (7.5) | (7.5) | — | (7.1) | (7.1) |
Past service costs – employer | — | (0.5) | (0.5) | — | — | — |
Administration expenses – employer | (2.2) | — | (2.2) | (1.7) | — | (1.7) |
Plan settlement | (4.0) | 4.0 | — | — | — | — |
Net interest on scheme assets and liabilities | 48.2 | (47.4) | 0.8 | 47.5 | (45.6) | 1.9 |
Total recognised in the income statement | 42.0 | (51.4) | (9.4) | 45.8 | (52.7) | (6.9) |
Return of plan assets | (41.1) | — | (41.1) | (108.1) | — | (108.1) |
| Effect of changes in demographic | — | 1.0 | 1.0 | — | 2.1 | 2.1 |
| assumptions | ||||||
Effect of changes in financial assumptions | — | 25.6 | 25.6 | — | 63.9 | 63.9 |
Effect of experience adjustments | — | 12.4 | 12.4 | — | 3.4 | 3.4 |
Total recognised in the SOCI | (41.1) | 39.0 | (2.1) | (108.1) | 69.4 | (38.7) |
Contributions by employer | 9.7 | — | 9.7 | 24.2 | — | 24.2 |
Total recognised in the cash flow statement | 9.7 | — | 9.7 | 24.2 | — | 24.2 |
Contributions by employees | 5.9 | (5.9) | — | 6.0 | (6.0) | — |
Change in member share | 5.9 | (5.9) | — | 6.0 | (6.0) | — |
Benefits paid | (58.6) | 58.6 | — | (54.4) | 54.4 | — |
Insurance premiums for risk benefits | (2.4) | 2.4 | — | (2.5) | 2.5 | — |
Transfer in of accrued benefits | — | — | — | 5.6 | (5.6) | — |
Foreign exchange | 5.2 | (5.9) | (0.7) | (4.2) | 5.1 | 0.9 |
Other movements | (55.8) | 55.1 | (0.7) | (55.5) | 56.4 | 0.9 |
At 31 December | 930.2 | (928.7) | 1.5 | 969.5 | (965.5) | 4.0 |
2025 | 2024 | |
Significant actuarial assumptions | % | % |
Discount rate | 5.55 | 5.50 |
Rate of salary increases | 2.70 | 3.05 |
RPI Inflation | 2.90 | 3.15 |
CPI Inflation – pre-retirement | 2.20 | 2.55 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 211
29. Retirement benefit schemes continued
2025 | 2024 | |
Post-retirement mortality 1 | years | years |
Current pensioners at 65 – male | 20.9 | 20.8 |
Current pensioners at 65 – female | 23.6 | 23.6 |
Future pensioners at 65 – male | 22.9 | 22.8 |
Future pensioners at 65 – female | 25.7 | 25.7 |
2025 | 2024 | |
Increase/(decrease) in defined benefit obligation of SPLAS | £m | £m |
Discount rate – 1.0% increase | (75.3) | (79.8) |
Discount rate – 1.0% decrease | 90.3 | 96.1 |
Inflation – 1.0% increase | 56.0 | 57.6 |
Inflation – 1.0% decrease | (57.4) | (53.7) |
Rate of salary increase – 1.0% increase | 0.9 | 1.1 |
Rate of salary increase – 1.0% decrease | (0.8) | (1.0) |
Mortality – one-year age rating | 20.9 | 23.3 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 212
29. Retirement benefit schemes continued
2025 | 2024 | ||
Authorised, issued and fully paid | £m | £m | |
1,002,743,103 | (2024: 1,023,855,243) ordinary shares of 2p each | 20.1 | 20.5 |
2025 | 2024 | |
Number | Number | |
Number of shares at 1 January | 1,023,855,243 | 1,103,545,966 |
Shares cancelled | (21,112,140) | (79,690,723) |
Number of shares at 31 December | 1,002,743,103 | 1,023,855,243 |
2025 | 2024 | |
£m | £m | |
At 1 January and 31 December | 463.1 | 463.1 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 213
| Retirement | ||||||||
| benefit | Share-based | Capital | ||||||
| obligations | payment | Own shares | Treasury | Hedging | Translation | redemption | Total other | |
| reserve | reserve | reserve | shares | reserve | reserve | reserve | reserves | |
£m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January 2024 | (195.9) | 103.9 | (15.0) | — | (0.3) | (5.8) | 2.8 | (110.3) |
| Total comprehensive | ||||||||
loss for the year | (31.0) | — | — | — | (0.3) | (18.6) | — | (49.9) |
Shares purchased and held in own share | ||||||||
reserve | — | — | (22.8) | — | — | — | — | (22.8) |
Shares purchased and held in Treasury until cancelled | — | — | — | (141.3) | — | — | — | (141.3) |
| Cancellation of shares | ||||||||
held in Treasury | — | — | — | 141.3 | — | — | 1.6 | 142.9 |
Shares transferred to award holders on exercise of share awards | — | (17.0) | 17.1 | — | — | — | — | 0.1 |
Expense in relation to share-based payments | — | 15.2 | — | — | — | — | — | 15.2 |
| Tax credit on items taken | ||||||||
directly to equity | — | 0.7 | — | — | — | — | — | 0.7 |
At 1 January 2025 | (226.9) | 102.8 | (20.7) | — | (0.6) | (24.4) | 4.4 | (165.4) |
Total comprehensive income/(loss) for the year | 3.1 | — | — | — | 0.7 | (21.6) | — | (17.8) |
Shares purchased and held in own share | ||||||||
reserve | — | — | (5.0) | — | — | — | — | (5.0) |
Shares committed to be purchased and held in own share reserve | — | — | (21.3) | — | — | — | — | (21.3) |
Shares purchased and held in Treasury until cancelled | — | — | — | (50.3) | — | — | — | (50.3) |
| Cancellation of shares | ||||||||
held in Treasury | — | — | — | 50.3 | — | — | 0.4 | 50.7 |
Shares transferred to award holders on exercise of share awards | — | (15.6) | 19.5 | — | — | — | — | 3.9 |
Expense in relation to share-based payments | — | 13.6 | — | — | — | — | — | 13.6 |
| Tax credit on items taken | ||||||||
directly to equity | — | 5.0 | — | — | — | — | — | 5.0 |
At 31 December 2025 | (223.8) | 105.8 | (27.5) | — | 0.1 | (46.0) | 4.8 | (186.6) |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 214
32. Reserves continued
33. Share-based payment expense
The Group recognised the following expenses related to equity-settled share-based payment transactions:
2025 | 2024 | |
£m | £m | |
Long Term Incentive Plan | 10.6 | 12.3 |
Deferred Bonus Plan | 0.5 | 0.7 |
Equity Settled Bonus Plan | 0.2 | 0.2 |
MyShareSave Plan | 2.3 | 2.0 |
13.6 | 15.2 |
There are no cash settled arrangements and all schemes are issued by Serco Group plc for eligible employees within
the Group and its subsidiaries.
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 215
33. Share-based payment expense continued
| Number of | Weighted | Number of | Weighted | |
| shares under | average | shares under | average | |
| award | exercise price | award | exercise price | |
2025 | 2025 | 2024 | 2024 | |
thousands | £ | thousands | £ | |
Outstanding at 1 January | 27,054 | nil | 28,341 | nil |
Granted during the year | 11,578 | nil | 9,290 | nil |
Dividend equivalent granted during the year | 720 | nil | 555 | nil |
Exercised during the year | (7,062) | nil | (8,364) | nil |
Lapsed during the year | (4,361) | nil | (2,768) | nil |
Outstanding at 31 December | 27,929 | nil | 27,054 | nil |
In the year, 11,578,394 grants were made, of which 1,519,916 were non-performance related. The remaining
10,058,478 awards were performance-based awards, split between the following performance conditions: EPS (25%
weighting), average ROIC (25%) and relative TSR (20%), together with two growth measures aligned to our medium-
term growth goals (total of 20% weighting split between the book-to-bill ratio and organic revenue growth), and an ESG
scorecard (10%). The rewards, subject to market-based performance conditions (such as the TSR condition for these
awards) were valued using the Monte Carlo Simulation model. For all other awards, the fair value is equal to the share
price on the date of grant; no adjustment to the market price is required as the awards accrue dividend equivalents.
The Monte Carlo Simulation model is considered to be the most appropriate for valuing awards granted under
schemes where there are changes in performance conditions by which the awards are measured, such as for the
TSR-based awards.
The Monte Carlo Simulation model used the following inputs:
| 2025 | |
Weighted average share price | £1.59 |
Weighted average exercise price | nil |
Expected volatility | 21.9% |
Average expected life (years) | 2.67 |
Risk-free rate | 3.80% |
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous
three years. The expected life used in the model has been adjusted, based on Management’s best estimate, for the
effects of non-transferability, exercise restrictions and behavioural considerations.
The weighted average fair value of awards granted under this scheme in the year is £1.62 (2024: £1.74).
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 216
33. Share-based payment expense continued
| Number of | Number of | |||
| options or | Weighted | options or | Weighted | |
| shares | average | shares | average | |
| under award | exercise price | under award | exercise price | |
2025 | 2025 | 2024 | 2024 | |
thousands | £ | thousands | £ | |
Outstanding at 1 January | 2,978 | 0.02 | 4,357 | 0.02 |
Exercised during the year | (1,229) | 0.02 | (1,342) | 0.02 |
Lapsed during the year | (115) | 0.02 | (37) | 0.02 |
Outstanding at 31 December | 1,634 | 0.02 | 2,978 | 0.02 |
| Number of | Weighted | Number of | Weighted | |
| shares | average | shares | average | |
| under award | exercise price | under award | exercise price | |
2025 | 2025 | 2024 | 2024 | |
thousands | £ | thousands | £ | |
Outstanding at 1 January | 1,381 | nil | 1,875 | nil |
Granted during the year | 194 | nil | 212 | nil |
Dividend equivalent granted during the year | 4 | nil | 17 | nil |
Exercised during the year | (778) | nil | (723) | nil |
Outstanding at 31 December | 801 | nil | 1,381 | nil |
| Number of | Weighted | Number of | Weighted | |
| shares | average | shares | average | |
| under award | exercise price | under award | exercise price | |
2025 | 2025 | 2024 | 2024 | |
thousands | £ | thousands | £ | |
Outstanding at 1 January | 1,038 | nil | 1,209 | nil |
Granted during the year | 120 | nil | 163 | nil |
Dividend equivalent granted during the year | 4 | nil | 13 | nil |
Exercised during the year | (499) | nil | (347) | nil |
Outstanding at 31 December | 663 | nil | 1,038 | nil |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 217
33. Share-based payment expense continued
None of these awards were exercisable at the end of the year (2024: none). The awards outstanding at 31 December
2025 had a weighted average contractual life remaining of 0.9 years (2024: 0.9 years).
There were 120,036 new awards granted under the Equity Settled Bonus Plan in the year. The fair value of these non-
performance awards is equal to the share price on the date of grant. No adjustment to the market price is required as
the awards accrue dividend equivalents.
The weighted average fair value of awards granted under this scheme in the year is £1.59 (2024: £1.90).
| Number of | Weighted | Number of | Weighted | |
| shares | average | shares | average | |
| under award | exercise price | under award | exercise price | |
2025 | 2025 | 2024 | 2024 | |
thousands | £ | thousands | £ | |
Outstanding at 1 January | 15,637 | 1.32 | 10,906 | 1.25 |
Granted during the year | — | — | 6,349 | 1.42 |
Exercised during the year | (3,155) | 1.26 | (124) | 1.26 |
Lapsed during the year | (1,939) | 1.33 | (1,494) | 1.26 |
Outstanding at 31 December | 10,543 | 1.34 | 15,637 | 1.32 |
There were no new awards granted under the MyShareSave plan in the year.
| Current | Non-current | Current | Non-current | |||
| Transactions | outstanding | outstanding | Transactions | outstanding | outstanding | |
2025 | 2025 | 2025 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | £m | |
| Sale of goods and services | ||||||
Joint ventures | 11.7 | 1.1 | — | 20.2 | (0.2) | — |
Associates | 15.3 | — | — | — | — | — |
Other Loan to joint venture | — | — | — | 10.0 | — | — |
Dividends received – joint ventures | 22.9 | — | — | 30.8 | — | — |
| Receivable from consortium for tax – joint | 8.3 | 4.3 | 9.0 | 9.6 | 9.4 | 10.1 |
| ventures | ||||||
Total | 58.2 | 5.4 | 9.0 | 70.6 | 9.2 | 10.1 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 218
34. Related party transactions continued
2025 | 2024 | |
£m | £m | |
Short-term employee benefits | 11.4 | 8.3 |
Post-employment benefits | 0.3 | 0.3 |
Termination benefits | 0.5 | 0.1 |
Share-based payment expense | 5.2 | 4.9 |
17.4 | 13.6 |
2025 | 2024 | |
£m | £m | |
Salaries, fees, bonuses and benefits in kind | 4.2 | 3.5 |
Amounts receivable under long-term incentive schemes | 2.8 | 2.8 |
Gains on exercise of share awards | 2.3 | 1.9 |
9.3 | 8.2 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 219
35. Notes to the Consolidated Cash Flow Statement
| 2025 | 2024 | ||
Year ended 31 December | Note | £m | £m |
Profit before tax | 201.5 | 97.0 | |
Net finance costs | 44.8 | 33.1 | |
Operating profit for the year | 246.3 | 130.1 | |
| Adjustments for: | |||
Share of profits in joint ventures and associates | 5 | (28.8) | (22.8) |
Share-based payment expense | 33 | 13.6 | 15.2 |
Impairment of intangible assets | 17 | 1.1 | 2.0 |
Amortisation of intangible assets | 17 | 37.7 | 35.2 |
Impairment of goodwill | 16 | — | 114.5 |
Impairment/(reversal of impairment) of property, plant and equipment | 18 | 0.1 | (0.4) |
Net impairment of right of use assets | 18 | 2.1 | 0.2 |
Depreciation of property, plant and equipment | 18 | 18.5 | 17.2 |
| Deprecation of right of use assets | 18 | 165.3 | 141.5 |
Loss on disposal of intangible assets | 9 | — | 0.7 |
(Profit)/loss on early termination of leases | 9 | (0.6) | 0.1 |
Profit on disposal of property, plant and equipment | 9 | (0.6) | (0.3) |
Profit on disposal of subsidiaries | 8 | (4.7) | — |
Decrease in provisions | (0.7) | (3.1) | |
Total non-cash items | 203.0 | 300.0 | |
Operating cash inflow before movements in working capital | 449.3 | 430.1 | |
Decrease/(increase) in inventories | 3.7 | (0.7) | |
Increase in receivables | (8.0) | (1.9) | |
Increase in payables | 47.5 | 32.9 | |
Movements in working capital | 43.2 | 30.3 | |
Cash generated by operations | 492.5 | 460.4 | |
Tax paid | (43.4) | (41.3) | |
| Disposal-related costs paid | 8 | (2.3) | — |
| Non-cash R&D (expenditure)/credit | (0.1) | 0.3 | |
Net cash inflow from operating activities | 446.7 | 419.4 |
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 220
35. Notes to the Consolidated Cash Flow Statement continued
Below are the reconciliations of working capital items and provisions between the movements in the Consolidated
Balance Sheet on page 153 and the table above.
| Contract | Contract | Contract | Contract | |||||
| Assets, | Liabilities, | Assets, | Liabilities, | |||||
| Trade and | Trade and | Trade and | Trade and | |||||
| Other | Other | Other | Other | |||||
| Inventories | Receivables | Payables | Provisions | Inventories | Receivables | Payables | Provisions | |
2025 | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | £m | £m | £m | |
Balance sheet at 1 January | 24.1 | 657.8 | (714.7) | (190.3) | 24.1 | 640.4 | (662.2) | (170.3) |
Balance sheet at 31 December | 20.0 | 669.3 | (752.0) | (188.8) | 24.1 | 657.8 | (714.7) | (190.3) |
Movement per balance sheet | (4.1) | 11.5 | (37.3) | 1.5 | — | 17.4 | (52.5) | (20.0) |
Arising on acquisition | — | (20.4) | 6.5 | 1.2 | — | (29.5) | 9.0 | 27.0 |
Eliminated on disposal of a subsidiary | 0.3 | 10.9 | (15.6) | (4.2) | — | — | — | — |
| Movement on deferred | ||||||||
consideration on acquisition | — | — | (1.7) | — | — | — | 9.5 | — |
| Movement on interest | ||||||||
receivables/payables | — | (0.5) | 3.0 | — | — | (0.6) | 3.0 | — |
Pension contributions in (shortfall)/excess of charge in income statement | — | — | (0.5) | — | — | — | 15.4 | — |
Transfer from provision to working capital | — | 1.6 | (0.3) | (1.6) | — | — | — | — |
Capitalised in right of use assets | — | — | — | 0.8 | — | — | — | 2.0 |
| Charge claims covered by third | ||||||||
parties | — | (2.4) | — | 2.4 | — | — | — | — |
Exchange differences | 0.1 | 7.3 | (1.6) | 0.6 | 0.7 | 14.6 | (17.3) | (5.9) |
Movement per notes to the Consolidated Cash Flow | ||||||||
Statement | (3.7) | 8.0 | (47.5) | 0.7 | 0.7 | 1.9 | (32.9) | 3.1 |
36. Post balance sheet events
Dividends
Subsequent to the year end, the Board has recommended the payment of a final dividend in respect of the year
ended 31 December 2025 of 3.05 pence per share. The dividend remains subject to shareholder approval at the
Annual General Meeting and therefore no amounts have been recognised in respect of a dividend in these
Consolidated Financial Statements.
Serco share buyback
The Group has announced its intention to commence a share buyback of up to £75m. Consistent with the Group’s
capital allocation policy, the objective of the programme is to provide additional returns to shareholders as well as
aid the Group in meeting its medium-term leverage targets. The buyback programme is expected to complete by 31
July 2026 with the shares either held in treasury or cancelled.
Employee Share Ownership Trust
Subsequent to the year end, the Group’s Employee Share Ownership Trust completed the purchase of 8m shares at
the cost (including fees) of £23.8m. These shares were committed to be purchased prior to 31 December 2025 and
£21.3m of the cost was funded in advance and included in the own share reserve at year end. These shares will be
held in the own share reserve until they are transferred to award holders on the exercise of share awards.
Middle East conflict
As at the date of signing there has been no material impact on our business due to the recent events in the Middle
East. Management continues to monitor events across the region very closely.
Notes to the Consolidated Financial Statements continued
Serco Group plc | Annual Report and Accounts 2025 | 221
2025 2024
At 31 December Note £m £m
Fixed assets
Right of use assets 38 0.2 0.2
Investments in subsidiaries 39 2,052.5 2,052.5
2,052.7 2,052.7
Current assets
Debtors: amounts due within one year 40 16.8 11.5
Debtors: amounts due after more than one year 40 632.5 397.8
Corporation tax assets 12.3 17.9
Derivative financial instruments 44 0.7 1.1
Cash at bank and in hand 100.9 101.3
763.2 529.6
Total assets 2,815.9 2,582.3
Creditors: amounts falling due within one year
Trade and other payables 41 (145.9) (155.2)
Loans 42 — (38.8)
Corporation tax liability (0.2) —
Derivative financial instruments 44 (0.8) (6.8)
Provisions 43 — (6.6)
(146.9) (207.4)
Net current assets 616.3 322.2
Creditors: amounts falling due after more than one year
Loans 42 (404.9) (237.6)
Amounts owed to subsidiary companies (1,245.0) (1,013.5)
(1,649.9) (1,251.1)
Total liabilities (1,796.8) (1,458.5)
Net assets 1,019.1 1,123.8
Capital and reserves
Called up share capital 46 20.1 20.5
Share premium account 47 463.1 463.1
Capital redemption reserve 4.7 4.3
Profit and loss account 48 475.6 571.6
Share-based payment reserve 83.1 85.0
Own shares reserve 49 (27.5) (20.7)
Total shareholders' funds 1,019.1 1,123.8
The accompanying notes form an integral part of the financial statements.
The Company has not presented its own profit and loss account as permitted by Section 408 of the Companies Act
2006. The total loss for the year was £2.4 m (2024: profit of £125.3 m) and the total comprehensive loss for the year
was £2.4m (2024: profit of £125.3m).
The financial statements were approved by the Board of Directors on 4 March 2026 and signed on its behalf by:
Anthony Kirby Nigel Crossley
Group Chief Executive Group Chief Financial Officer
Company Balance Sheet
Serco Group plc | Annual Report and Accounts 2025 | 222
Share capital
Share
premium
account
Capital
redemption
reserve
Profit and loss
account
Treasury
shares reserve
Share-based
payment
reserve
Own shares
reserve
Total
shareholders'
equity
£m £m £m £m £m £m £m £m
At 1 January 2024 22.1 463.1 2.7 626.0 — 86.3 (15.0) 1,185.2
Total comprehensive
income for the year — — — 125.3 — — — 125.3
Dividends paid — — — (38.4) — — — (38.4)
Shares purchased
and held in own
share reserve — — — — — — (22.8) (22.8)
Shares purchased
and held in Treasury — — — — (141.3) — — (141.3)
Cancellation of
shares held in
Treasury (1.6) — 1.6 (141.3) 141.3 — — —
Shares transferred
to option holders
on exercise — — — — — (17.0) 17.1 0.1
Awards over
parent's shares
made to employees
of subsidiaries — — — — — 8.9 — 8.9
Expense in relation
to share-based
payments — — — — — 6.3 — 6.3
Tax credit on items
taken directly to
equity — — — — — 0.5 — 0.5
At 1 January 2025 20.5 463.1 4.3 571.6 — 85.0 (20.7) 1,123.8
Total comprehensive
income for the year — — — (2.4) — — — (2.4)
Dividends paid — — — (43.3) — — — (43.3)
Shares purchased
and held in own
share reserve — — — — — — (5.0) (5.0)
Shares committed
to be purchased
and held in own
share reserve — — — — — — (21.3) (21.3)
Shares purchased
and held in Treasury — — — — (50.3) — — (50.3)
Cancellation of
shares held in
Treasury (0.4) — 0.4 (50.3) 50.3 — — —
Shares transferred
to option holders
on exercise — — — — — (15.6) 19.5 3.9
Awards over
parent's shares
made to employees
of subsidiaries — — — — — 8.5 — 8.5
Expense in relation
to share-based
payments — — — — — 5.0 — 5.0
Tax credit on items
taken directly to
equity — — — — — 0.2 — 0.2
At 31 December
2025 20.1 463.1 4.7 475.6 — 83.1 (27.5) 1,019.1
Company Statement of Changes in Equity
Serco Group plc | Annual Report and Accounts 2025 | 223
37. Material accounting policies
The principal accounting policies adopted are set out below and have been applied consistently throughout the
current and preceding year.
Basis of accounting
The Company meets the definition of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by
the Financial Reporting Council. These financial statements were prepared in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (FRS 101). In preparing these financial statements, the Company
applies the recognition, measurement and disclosure requirements of the UK-adopted International Financial
Reporting Standards but makes amendments where necessary in order to comply with the Companies Act 2006 and
has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The Company has not presented its own profit and loss account as permitted by Section 408 of the Companies Act
2006. As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that
standard in relation to share-based payments, financial instruments, capital management, presentation of
comparative information in respect of certain assets, presentation of a cash flow statement, standards not yet
effective, impairment of assets and related party transactions.
The financial statements have been prepared on the historical cost basis and the going concern basis, except for the
revaluation of certain financial instruments. Historical cost is generally based on the fair value of the consideration
given in exchange for the goods and services. The principal accounting policies adopted are the same as those set
out in note 2 to the Consolidated Financial Statements, except as noted below.
Fixed asset investments
Investments held as fixed assets are stated at cost less provision for any impairment in value.
38. Right of use assets
Leased vehicles of £0.2m (2024: £0.2m) have been included on the balance sheet.
39. Investments held as fixed assets
Shares in subsidiary companies at cost £m
At 1 January 2024, 1 January 2025, 31 December 2025 2,052.5
An impairment test has been performed at the year end by comparing the carrying amount of 100% of investments
with the relevant subsidiary financial information to identify whether their net assets, being an approximation of their
recoverable amount, are in excess of their carrying amount. No impairment resulted from this test.
A full list of subsidiaries and related undertakings is included in note 52 which forms part of the financial statements.
40. Debtors
2025 2024
Amounts due within one year £m £m
Prepayments 0.5 0.4
Amounts owed by subsidiary companies 5.0 0.9
Prepaid intercompany interest 11.3 10.2
16.8 11.5
2025 2024
Amounts due after more than one year £m £m
Amounts owed by subsidiary companies 632.5 397.8
The expected credit loss provision against amounts owed by subsidiary companies is immaterial.
Notes to the Company Financial Statements
Serco Group plc | Annual Report and Accounts 2025 | 224
41. Trade and other payables
2025 2024
Amounts due within one year £m £m
Amounts owed to subsidiary companies 96.3 103.7
Trade creditors 1.3 0.2
Accruals and deferred income 48.0 51.2
Other creditors including taxation and social security 0.3 0.1
145.9 155.2
42. Loans
2025 2024
£m £m
Loans are repayable as follows:
On demand or within one year — 38.8
Between one and two years 59.0 —
Between two and five years 82.5 122.2
After five years 263.4 115.4
404.9 276.4
Less: amount due for settlement within one year (shown within current liabilities) — (38.8)
Amount due for settlement after one year 404.9 237.6
43. Provisions
Amounts due within one year
Contract
£m
At 1 January 2025 6.6
Released to the income statement (6.6)
At 31 December 2025 —
44. Derivative financial instruments
Assets Liabilities Assets Liabilities
2025 2025 2024 2024
£m £m £m £m
Forward foreign exchange contracts 0.7 (0.8) 1.1 (6.8)
Analysed as
Current 0.7 (0.8) 1.1 (6.8)
The Company holds derivative financial instruments in accordance with the Group’s policy in relation to its financial
risk management. More information is set out in note 28 of the Group’s Consolidated Financial Statements.
Notes to the Company FinancialStatements continued
Serco Group plc | Annual Report and Accounts 2025 | 225
45. Deferred tax
The movement in the deferred tax asset during the year was as follows:
2025 2024
£m £m
At 1 January — —
Credit to profit and loss account — —
At 31 December — —
The deferred tax asset not recognised is as follows:
2025 2024
At 31 December £m £m
Temporary differences on assets/liabilities 0.1 0.2
Share-based payments and employee benefits 0.5 1.0
Other temporary differences 1.6 2.9
Tax losses 46.3 46.3
48.5 50.4
46. Called up share capital
2025 2024
Authorised, issued and fully paid £m £m
1,002,743,103 (2024: 1,023,855,243) ordinary shares of 2p each 20.1 20.5
2025 2024
Number Number
Number of shares at 1 January 1,023,855,243 1,103,545,966
Shares cancelled (21,112,140) (79,690,723)
Number of shares at 31 December 1,002,743,103 1,023,855,243
The Company has one class of ordinary shares which carry no right to fixed income.
47. Share premium account
2025 2024
£m £m
Share premium account 463.1 463.1
48. Profit and loss
2025 2024
£m £m
At 1 January 571.6 626.0
(Loss)/profit for the year (2.4) 125.3
Equity dividends paid (43.3) (38.4)
Cancellation of shares held in Treasury (50.3) (141.3)
At 31 December 475.6 571.6
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company is not presented
as part of these accounts. The total loss for the year was £2.4m (2024: profit of £125.3m) and the total comprehensive
loss for the year was £2.4m (2024: profit of £125.3m).
The Company plans to maintain sufficient funds and distributable reserves to allow payments of projected dividends
to shareholders.
Notes to the Company FinancialStatements continued
Serco Group plc | Annual Report and Accounts 2025 | 226
49. Other reserves
Share based payment reserve
The share-based payment reserve represents credits relating to equity-settled share-based payment transactions and
any gain or loss on the exercise of share award schemes satisfied by own shares.
Details of the share-based payment disclosures are set out in note 33 of the Group’s Consolidated Financial Statements.
Treasury shares reserve
The Treasury shares reserve represents amounts paid to repurchase ordinary shares. On 7August 2025, the Group
announced its intention to repurchase ordinary shares with a value of up to £50m. The buyback programme took place
between 11August 2025 and 3December 2025. During this period, the Group repurchased 21,112,140 shares at an
average cost of £2.384 for total cost including fees of £50.3m. All shares purchased in 2025 have been cancelled.
Own share reserve
The own shares reserve represents the cost of shares in Serco Group plc held by the Serco Group plc Employee
Share Ownership Trust (ESOT) to satisfy awards under the Group’s share plan schemes. At 31December 2025, the
ESOT held 4,043,139 (2024: 13,418,111) shares equal to 0.4% of the current allotted share capital (2024: 1.3%).
The market value of shares held by the ESOT as at 31December 2025 was £11.3m (2024: £20.3m). The ESOT is
committed to purchase 8,000,000 shares, which were funded prior to 31December 2025 and the expected cost of
£21.3m is included in the own share reserve.
50. Contingent liabilities
The Company and its subsidiaries have provided certain guarantees and indemnities in respect of performance and
other bonds, issued by its banks on its behalf in the ordinary course of business. The total commitment outstanding as
at 31December 2025 was £153.5m (2024: £210.4m).
The Company is also aware of other claims and potential claims which involve or may involve legal proceedings
against the Company although the timing of settlement of these claims remains uncertain. The Directors are of the
opinion, having regard to legal advice received and the Company’s insurance arrangements, that it is unlikely that
these matters will, in aggregate, have a material effect on the Company’s financial position.
The Company has a guarantee in place with the SPLAS Trustees in respect of any pension contribution obligations that
remain unpaid after 30 days of being due from other Group entities, including the plan sponsor, up to a total of £200m
(2024: £200m) less contributions made by the Group since April 2022. This guarantee runs until 2030 (2024: 2030).
The Company has guaranteed overdrafts, leases, and bonding facilities of its joint ventures and associates up to a maximum
value of £5.7m (2024: £5.7m). The actual commitment outstanding at 31December 2025 was £5.7m (2024: £5.7m).
51. Related party transactions
The Directors of Serco Group plc had no material transactions with the Company or its subsidiaries during the year
other than service contracts and Directors’ liability insurance. Details of the Directors’ remuneration are disclosed in
the Remuneration Report for the Group.
Transactions between the Company and its wholly-owned subsidiaries are not disclosed in this note as they are
exempt from disclosure under FRS 101. The following transactions between the Company and subsidiaries that are
not wholly owned, joint ventures and associates are set out below:
Transactions
Current
outstanding
Non-current
outstanding Transactions
Current
outstanding
Non-current
outstanding
2025 2025 2025 2024 2024 2024
£m £m £m £m £m £m
Loan interest receivable 3.9 — — 2.9 — —
Loans to subsidiaries not wholly owned 12.2 — (5.5) (0.2) — (19.0)
Loan to joint venture — — — 10.0 — —
Receivables from consortium for tax - joint ventures 7.3 4.3 7.9 9.2 7.7 10.1
Total 23.4 4.3 2.4 21.9 7.7 (8.9)
Notes to the Company FinancialStatements continued
Serco Group plc | Annual Report and Accounts 2025 | 227
52. List of subsidiaries and related undertakings
ACN 611 392 744 Pty Ltd 49% Subsidiary Level 6, 123 Epping Road, Macquarie Park, NSW
2113, Australia
AI Recruiting BV 100% Subsidiary Kapteynstraat 1, 2201 BB Noordwijk, The Netherlands
BRTRC Federal Solutions, Inc. 100% Subsidiary 12930 Worldgate Drive, Suite 600, Herndon, VA 20170,
United States
Cardinal Insurance Company Limited 100% Subsidiary Dorey Court, Admiral Park, St Peter Port, GY1 4AT,
Guernsey
Clemaco Trading NV 100% Subsidiary Sint-Sebastiaanstraat 5, 8400 Oostende, Belgium
Climatize Engineering Consultants FZE 100% Subsidiary Building no. A4, Al Hamra Industrial Zone F-Z, Ras Al
Khaimah (RAK), A4-901, United Arab Emirates
Climatize Engineering Consultants L.L.C 100% Subsidiary 20th Floor, Rolex Tower, Sheik Zayed Road, Dubai,
Dubai, United Arab Emirates
Conflucent Innovations, L.L.C. 49% Joint venture 5880 Innovation Drive, Dublin, OH 43016, United States
Decisive Analytics Corporation 100% Subsidiary 12930 Worldgate Drive, Suite 600, Herndon, VA 20170,
United States
Defence Contractor Management and
Operations Limited
24.5% Associate Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Djurgårdens Färjetrafik AB 50% Joint venture Svensksundsvägen 19, 111 49 Stockholm, Sweden
DMS Maritime Pty Limited 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
European Homecare GmbH 100% Subsidiary 22a,Schürmannstraße, Essen, 45136, Germany
Innu Serco Inc 49% Joint venture P.O. Box 1012, Station C, Happy Valley – Goose Bay,
NL, A0P 1C0, Canada
Innu Serco Limited Partnership 49% Joint venture P.O. Box 1012, Station C, Happy Valley – Goose Bay,
NL, A0P 1C0, Canada
International Aeradio (Emirates) L.L.C. – Abu
Dhabi
49% Subsidiary Office no. 503, 5th Floor, Al Muhairy Building,
ZayedThe First Street, PO Box 3164 Abu Dhabi,
United Arab Emirates
JBI Properties Services Company L.L.C. 49% Subsidiary Alnahyan East 19, Ayad Alharazeen Building, Abu
Dhabi, United Arab Emirates
Joint Integrated Range Solutions L.L.C. 49% Joint venture 8337 W. Sunset Road, Suite 250, Las Vegas, NV 89113,
United States
Khadamat Facilities Management L.L.C. 45% Associate The United Arab Emirates University, Al Jamea Street,
Al Maqam District, PO Box 66718 Al Ain, United Arab
Emirates
Lift BV 100% Subsidiary Kapteynstraat 1, 2201 BB Noordwijk, Netherlands
Mahani Technical Services, L.L.C. 49% Joint venture 511 Duckwater Fall Road, Duckwater, NV, 89314,
United States
Merseyrail Electrics 2002 Limited 50% Joint venture Rail House, Lord Nelson Street, Liverpool, Merseyside,
L1 1JF, United Kingdom
Merseyrail Services Holding Company Limited
3
50% Joint venture St Andrews House, 18 - 20 St. Andrew Street, London,
EC4A 3AG, United Kingdom
ORS Deutschland GmbH 100% Subsidiary Güterhallenstrasse 4, 79106 Freiburg, Germany
ORS España Servicios Sociales, S.L. 100% Subsidiary Avda Felipe II 1 7 1 ° Madrid 28009-Madrid, Spain
ORS Greece Monoprosopi A.E 100% Subsidiary 280, Kifisias Ave., Chalandri, Greece
ORS Italia S.r.l 100% Subsidiary Piazza Annibaliano, 18 CAP 00198 Presso Studio
Filippini & Ass, Italy
ORS Service AG 100% Subsidiary Röschibachstrasse 22, 8037 Zürich, Switzerland
ORS Service GmbH (Austria) 100% Subsidiary Leopold-Ungar-Platz 2, 1190, Döbling, Wien, Austria
ORS Slovakia s.r.o 100% Subsidiary Grösslingova 45, Bratislava, Slovakia
Priority Properties North West Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Sapienza Consulting GmbH
2
100% Subsidiary Lise-Meitner-Straße 10, 64293 Darmstadt, Germany
Sapienza Consulting Holding BV 100% Subsidiary Kapteynstraat 1, 2201 BB Noordwijk, Netherlands
Company name
Serco Group
ownership
interest
Treatment Registered office address
Notes to the Company FinancialStatements continued
Serco Group plc | Annual Report and Accounts 2025 | 228
52. List of subsidiaries and related undertakings continued
Company name
Serco Group
ownership
interest
Treatment Registered office address
Sapienza Consulting Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco (Jersey) Limited 100% Subsidiary 26 New Street, St. Helier, JE2 3RA, Jersey
Serco Australia Pty Limited
3
100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Belgium S.A. 100% Subsidiary 1945 Chaussée de Wavre, 1160 Auderghem, Brussels,
Belgium
Serco Caledonian Sleepers Limited 100% Subsidiary C/O Serco NorthLink Ferries Aberdeen Ferry Terminal,
Jamieson's Quay, Aberdeen, United Kingdom, AB11 5NP
Serco Canada Inc. 100% Subsidiary 37 Carl Hall Rd, North York, ON M3K 2B6, Canada
Serco Canada Marine Corporation 100% Subsidiary 555 Legget Drive, Suite 400, Tower A, Ottawa, ON,
K2K 2X3, Canada
Serco Citizen Services Pty Ltd 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Corporate Services Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Czech Republic s.r.o. 100% Subsidiary Na Perštýně 342/1, Staré Město, Prague, 110 00,
Czech Republic
Serco Defence Clothing Pty Ltd 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Defence S.A. 100% Subsidiary 1945 Chaussée de Wavre, 1160 Auderghem, Brussels,
Belgium
Serco Defence Services Pty Ltd 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Facilities Management Holdings Pty Limited 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Facilities Management Pty Limited 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Facilities Management Sub-Holdings Pty
Limited
100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Ferries (Guernsey) Crewing Limited 100% Subsidiary St Martins House, Le Bordage, St Peter Port, GY1 4EA,
Guernsey
Serco Ferries (HR) Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Gestion de Negocios S.L.U. 100% Subsidiary Calle José Lázaro Galdiano nº 4, 2º E, CP28036,
Madrid, Spain
Serco Group Pty Limited
3
100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco Holdings Limited
1
100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Inc.
3
100% Subsidiary 12930 Worldgate Drive, Suite 600, Herndon, VA 20170,
United States
Serco Investments Holdings Limited 50% Joint venture Floor 24, Tower Al-Sila, Al-Mariya Island, Abu Dhabi,
United Arab Emirates
Serco Italia S.p.A. 100% Subsidiary Viale dell’Astronomia no. 13 – 00144 Roma, Italy
Serco Leisure Operating Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Limited
3
100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Listening Company Limited
2
100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Luxembourg S.A. 100% Subsidiary 8–10 Avenue de la Gare L-1610 Luxembourg
Serco Management L.L.C.
50%
Joint venture Al Nahyan, East 25, Abu Dhabi, United Arab Emirates
Serco Maritime Services NV 100% Subsidiary Sint-Sebastiaanstraat 5, 8400 Oostende, Belgium
Serco MENA Regional Head Quarters L.L.C.
O.P.C.
100% Subsidiary 8793 Riyadh Front, Unit S7, King Khalid Int. Airport
District, Riyadh 13413-3718, Kingdom of Saudi Arabia
Serco Netherlands B.V. 100% Subsidiary Kapteynstraat 1, 2201 BB Noordwijk ZH, Netherlands
Serco New Zealand (Asset Management
Services) Limited
100% Subsidiary Level 4, KPMG Centre, 18 Viaduct Harbour Avenue,
Auckland Central, Auckland, 1010, New Zealand
Notes to the Company FinancialStatements continued
Serco Group plc | Annual Report and Accounts 2025 | 229
52. List of subsidiaries and related undertakings continued
Company name
Serco Group
ownership
interest
Treatment Registered office address
Serco New Zealand Limited 100% Subsidiary Level 4, KPMG Centre, 18 Viaduct Harbour Avenue,
Auckland Central, Auckland, 1010, New Zealand
Serco New Zealand Training Limited 100% Subsidiary Level 4, KPMG Centre, 18 Viaduct Harbour Avenue,
Auckland Central, Auckland, 1010, New Zealand
Serco North America (Holdings), Inc. 100% Subsidiary 1209 Orange Street, Wilmington, DE 19801, United States
Serco Nunavut Ltd 49% Joint venture Field Law, House 2436, PO Box 1734, Iqaluit, NU X0A
0H0, Canada
Serco Paisa Limited
2
50% Joint Venture 80 Fenchurch Street, London, EC3M 4BY
Serco Pension Trustee Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco Projects L.L.C. 49% Joint Venture Office Number 1904, 19th Floor, Serco Projects, The
E18hteen, Alliance Business Center, Doha, PO BOX
23107, Qatar
Serco Safety Services L.L.C. 100% Subsidiary 20th Floor, Rolex Tower, Sheik Zayed Road, Dubai,
Dubai, United Arab Emirates
Serco S.a.r.l. 100% Subsidiary le Technoparc Gessien, 15 Rue Lumière, 01630 Saint-
Genis-Pouilly, France
Serco SAS 100% Subsidiary Bourg en Bresse, Technoparc du pays de Gex, 15 rue
Lumiere, 01630 Saint-Genis-Pouilly, France
Serco Saudi Arabia L.L.C. 100% Subsidiary Building No 7026, Postal Code 13458 Airport Road,
King Khaled International Airport District, Kingdom of
Saudi Arabia, Secondary No 2795, Riyadh, 13458,
Saudi Arabia
Serco Saudi Firefighting L.L.C. 95% Subsidiary Building No 7026, Postal Code 13458 Airport Road,
King Khaled International Airport District, Kingdom of
Saudi Arabia
Serco Security Academy SAS 100 Subsidiary 14, Boulevard desAlliés, Calais, 62100, France
Serco Security Services SAS 100% Subsidiary 15 Rue Lumière, Technoparc Pays de Gex, 01630 Saint
Genis Pouilly, France
Serco Services GmbH 100% Subsidiary Lise-Meitner-Straße 10, 64293 Darmstadt
Serco Singapore Pte Limited 100% Subsidiary 38 Beach Road, #29-11 South Beach Tower,
Singapore, 189767
Serco Switzerland S.A. 100% Subsidiary 86bis Route de Frontenex, 1208 Geneva, Switzerland
Serco Traffic Camera Services (VIC) Pty Limited 100% Subsidiary Level 23, 60 Margaret Street, Sydney, NSW 2000, Australia
Serco-IAL Limited 100% Subsidiary Serco House, 16 Bartley Wood Business Park, Bartley
Way, Hook, Hampshire, RG27 9UY, United Kingdom
Serco-IPS Corporation 100% Subsidiary 12930 Worldgate Drive, Suite 600, Herndon, VA
20170, United States
Signature Data Solutions, LLC 49% Joint venture 100 Quality Circle, Suite 200, Huntsville, AL 35806
TeamXDefenceLimited 50% Joint venture 77 Kingsway, London, England, United Kingdom,
WC2B 6SR
VectorOps, LLC 49%
Joint venture
7288 Hanover Green Dr Ste A,Mechanicsville, VA,
23111-1709, United States
Vivo Defence Services Limited
3
50% Joint venture First Floor, Neon Q10 Quorum Business Park, Benton
Lane, Newcastle Upon Tyne, NE12 8BU, United Kingdom
Whitney, Bradley & Brown, Inc. 100% Subsidiary 12930 Worldgate Drive, Suite 600, Herndon, VA 20170,
United States
1. Serco Holdings Limited is directly owned by Serco Group plc. All other subsidiaries and associated undertakings are held indirectly via Group companies.
2. Companies in liquidation or with an active proposal for strike off as at 31 December 2025.
3. Companies key to the consolidated numbers, all of which are engaged in the provision of support services.
Notes to the Company FinancialStatements continued
Serco Group plc | Annual Report and Accounts 2025 | 230
Alternative Performance Measures (APMs) reconciliations
Overview
In general, APMs are presented externally to meet investors’ requirements for further clarity and transparency of the
Group’s financial performance. The APMs are also used internally in the management of our business performance,
budgeting and forecasting, and for determining Executive Directors’ remuneration and that of other Management
throughout the business.
APMs are non-IFRS measures. Where additional revenue is being included in an APM, this reflects revenues
presented elsewhere within the reported financial information, except where amounts are recalculated to reflect
constant currency. Where items of income or expense are being excluded in an APM, these are included elsewhere in
our reported financial information as they represent actual income or expense of the Group, except where amounts
are recalculated to reflect constant currency. As a result, APMs allow investors and other readers to review different
kinds of revenue, profits and costs, and should not be used in isolation. Commentary included in the Group and
Divisional Review, as well as the Consolidated Financial Statements and their accompanying notes, should be
referred to in order to fully appreciate all the factors that affect our business. We strongly encourage readers not to
rely on any single financial measure, but to carefully review our reporting in its entirety.
Definitions of the Group’s APMs are shown in the glossary on pages 236 to 237 and the reconciliations for each
measure are shown as follows:
Alternative revenue measures
A reconciliation of reported revenue to the alternative revenue measures is as follows:
Statutory
revenue
Statutory
revenue
Organic
revenue
Organic
revenue
Revenue plus
share of joint
ventures and
associates
Revenue plus
share of joint
ventures and
associates
2025 2024 2025 2024 2025 2024
Year ended 31 December £m £m £m £m £m £m
Alternative revenue measure
atconstant currency 4,954.8 4,787.3 4,810.1 4,767.8 5,469.6 5,291.8
Foreign exchange differences (78.0) — (72.6) — (78.1) —
Alternative revenue measure
atreported currency 4,876.8 4,787.3 4,737.5 4,767.8 5,391.5 5,291.8
Impact of relevant acquisitions
ordisposals — — 139.3 19.5 — —
Share of joint venture and associates — — — — (514.7) (504.5)
Reported revenue at reported currency 4,876.8 4,787.3 4,876.8 4,787.3 4,876.8 4,787.3
Alternative profit measures
A reconciliation of underlying operating profit to reported operating profit is as follows:
2025 2024
Year ended 31 December £m £m
Underlying operating profit at constant currency 276.6 273.5
Foreign exchange differences
(5.0) —
Underlying operating profit at reported currency 271.6 273.5
Amortisation and impairment of intangibles arising on acquisition
(30.0) (28.9)
Exceptional item – Goodwill impairment
— (114.5)
Profit on disposal of subsidiary
4.7 —
Reported operating profit at reported currency
246.3 130.1
Alternative Performance Measures
Serco Group plc | Annual Report and Accounts 2025 | 232
Alternative Performance Measures (APMs) reconciliations continued
Underlying EPS
A reconciliation of underlying EPS to reported EPS is as follows:
2025 2024 2025 2024
Year ended 31 December
basic
pence
basic
pence
diluted
pence
diluted
pence
Underlying EPS 17.31 16.97 16.93 16.67
Non-underlying items:
Exceptional items, net of tax — (10.82) — (10.62)
Other non underlying items, net of tax (2.93) (1.98) (2.86) (1.95)
Reported EPS 14.38 4.17 14.07 4.10
Alternative cash flow measures
A reconciliation of net cash inflow from operating activities, free cash flow and trading cash flow is as follows:
2025 2024
Year ended 31 December
£m £m
Net cash inflow from operating activities 446.7 419.4
Dividends received 22.9 30.8
Net interest paid (40.3) (28.5)
Disposal-related costs paid 2.3 —
Capitalised finance costs paid (2.2) (1.0)
Capital element of lease repayments (158.9) (137.4)
Proceeds from exercise of share options 3.9 0.1
Purchase of own shares for Employee Share Trust (26.3) (22.8)
Net expenditure on tangible and intangible assets (28.8) (33.1)
Free cashflow 219.3 227.5
Add back:
Tax paid 43.4 41.3
Non-cash R&D expenditure/(credit) 0.1 (0.3)
Net interest paid 40.3 28.5
Capitalised finance costs paid 2.2 1.0
Trading cash flow 305.3 298.0
Underlying operating profit 271.6 273.5
Trading cash conversion 112 % 108.9 %
Alternative Performance Measures continued
Serco Group plc | Annual Report and Accounts 2025 | 233
Alternative Performance Measures (APMs) reconciliations continued
Free cash flow to adjusted net debt
A reconciliation from free cash flow to adjusted net debt is as follows:
2025 2024
Year ended 31 December £m £m
Free cash flow 219.3 227.5
Net cash outflow on acquisition and disposal of subsidiaries, joint ventures and associates (250.7) (20.8)
Disposal-related costs paid (2.3) –
Dividends paid to shareholders (43.3) (38.4)
Purchase of own shares (50.3) (141.3)
Loans repaid from joint venture – 10.0
Capitalisation and amortisation of loan costs 0.9 –
Cash movements on hedging instruments (8.9) (13.1)
Foreign exchange gain/(loss) on adjusted net debt 29.4 (15.0)
Movement in adjusted net debt (105.9) 8.9
Opening adjusted net debt - 1 January (99.8) (108.7)
Closing adjusted net debt - 31 December (205.7) (99.8)
Reported net debt to adjusted net debt
A reconciliation of adjusted net debt to reported net debt is as follows:
2025 2024
Year ended 31 December £m £m
Cash and cash equivalents 199.3 183.0
Loans payable (404.9) (276.4)
Lease liabilities (504.4) (530.0)
Derivatives relating to net debt (0.1) (6.4)
Reported net debt (710.1) (629.8)
Add back: Lease liabilities 504.4 530.0
Adjusted net debt (205.7) (99.8)
Underlying return on invested capital (ROIC)
Below is the calculation of Underlying ROIC:
Year ended 31 December 2025 2024
ROIC excluding right of use assets £m £m
Non-current assets
Goodwill
929.3 826.2
Other intangible assets - owned
162.2 101.4
Property, plant and equipment - owned
56.2 56.8
Interest in joint ventures
34.1 25.1
Contract assets, trade and other receivables
26.2 26.3
Current assets
Inventories
20.0 24.1
Contract assets, trade and other receivables
643.1 631.5
Total invested capital assets
1,871.1 1,691.4
Current Liabilities – Contract liabilities, trade and other payables
(649.7) (632.5)
Non-current liabilities – Contract liabilities, trade and other payables
(102.3) (82.2)
Total invested capital liabilities
(752.0) (714.7)
Invested capital
1,119.1 976.7
Two point average of opening and closing invested capital
1,047.9 1,043.8
Underlying operating profit 12 months
271.6 273.5
Underlying ROIC % 25.9% 26.2%
Alternative Performance Measures continued
Serco Group plc | Annual Report and Accounts 2025 | 234
Debt covenants
The principal financial covenant ratios are consistent across the US private placement loan notes and revolving credit
facility, with a maximum Consolidated Total Net Borrowings (CTNB) to covenant EBITDA of 3.5 times and minimum
covenant EBITDA to covenant net finance costs of 3.0 times, tested semi-annually. A reconciliation of the basis of
calculation is set out in the table below.
The covenants exclude the impact of IFRS 16 Leases on the Group’s results.
2025 2024
For the year ended 31 December £m £m
Operating profit 246.3 130.1
Remove: Exceptional items – 114.5
Remove: Amortisation and impairment of intangibles arising on acquisition 30.0 28.9
Exclude: Share of joint venture post-tax profits (28.8) (22.8)
Include: Dividends from joint ventures 22.9 30.8
Add back: Net non-exceptional charges/(releases) to OCPs 8.3 5.7
Add back: Net covenant OCP utilisation (3.3) (2.7)
Add back: Depreciation, amortisation and impairment of owned property, plant and equipment and non-
acquisition intangible assets 28.5 25.1
Add back: Depreciation, amortisation and impairment of property, plant and equipment and non-
acquisition intangible assets held under finance leases — in accordance with IAS 17 Leases 3.9 4.4
Add back: Foreign exchange on investing and financing arrangements (1.2) (2.1)
Add back: Share-based payment expense 13.6 15.2
Pro-forma annualised impact of acquisition 11.7 –
Net other covenant adjustments to EBITDA (15.3) (15.0)
Covenant EBITDA 316.6 312.1
Net finance costs 44.8 33.1
Exclude: Net interest receivable on retirement benefit obligations 0.8 1.9
Exclude: Movement in discount on deferred consideration (0.2) (0.8)
Exclude: Foreign exchange on investing and financing arrangements (1.2) (2.1)
Other covenant adjustments to net finance costs (22.8) (19.6)
Covenant net finance costs 21.4 12.5
Adjusted net debt 205.7 99.8
Obligations under finance leases - in accordance with IAS 17 Leases 9.4 13.1
Recourse net debt 215.1 112.9
Add back: Disposal vendor loan note, encumbered cash and other adjustments 3.6 (3.7)
Covenant adjustment for average FX rates 10.5 (5.9)
CTNB 229.2 103.3
CTNB/Covenant EBITDA (not to exceed 3.5x) 0.72x 0.33x
Covenant EBITDA/Covenant net finance costs (at least 3.0x) 14.8x 25.0x
Debt Covenants
Serco Group plc | Annual Report and Accounts 2025 | 235
Adjusted Net Debt
The Adjusted Net Debt measure more closely aligns with the
covenant measure for the Group’s financing facilities than
reported net debt because it excludes all lease liabilities
recognised under IFRS 16 Leases. Principally as a result of the
Asylum Accommodation and Support Services Contract (AASC),
the Group has entered into a significant number of leases which
contain a termination option. The use of Adjusted Net Debt
removes the volatility that would result from the estimation of
lease periods and the recognition of liabilities associated with
such leases where the Group has the right to cancel the lease.
Though the intention is not to exercise the options to cancel the
leases, it is available, unlike other debt obligations.
Colleagues
The number of colleagues is derived from the average number
of persons employed and includes all individuals employed
under contracts of service by the Group as disclosed in note 10
of the Financial Statements. This comprises permanent, part-
time, and casual employees, and those with fixed term
contracts. In contrast with the number of employees disclosed
in note 10 of the Financial Statements, colleagues also includes
self-employed contractors, other casual workers and employees
of Trusts. This is because such colleagues fall within Serco’s duty
of care and are within the scope of a number of our KPIs.
Employees of joint ventures where Serco is not the controlling
shareholder and sub-contractors are excluded.
Constant currency
Constant currency is calculated by translating non-Sterling
values for the year ended 31 December into Sterling at the
average exchange rates for the prior year. Constant currency
and reported currency are equal for the prior year numbers.
Employee engagement
We use a specialist third-party provider to run Viewpoint, our
global employee engagement survey. The survey covers
employees, excluding our joint ventures, and measures
engagement in two key areas: how happy employees are
working at Serco and their intention to recommend Serco to
others. Our engagement score incorporates all respondents’
perceptions and shows the overall average view of these two
areas when we survey.
Exceptional items
IAS 1 Presentation of Financial Statements sets out disclosure
requirements regarding fair representation of information and
the composition, labelling, prominence and consistency of
additional line items and subtotals in financial statements. IAS 1
paragraph 97 requires separate disclosure of the nature and
amount of material items of income or expense. The Group uses
the term ‘exceptional items’ to categorise those items which
require disclosure under IAS 1 paragraph 97, but this is not a
term defined by IFRS. A level of judgement is involved in
determining what items are classified as exceptional items.
Management considers exceptional items to be outside of normal
practice of the business (i.e. the financial impact is unusual or rare
in occurrence), and are material to the results of the Group by
virtue of their size or nature, and are suitable for separate
presentation and detailed explanation. There is a level of
judgement required in determining which items are exceptional
on a consistent basis and require separate disclosure.
Free Cash Flow (FCF)
Free cash flow is the net cash flow from operating activities
adjusted to remove the impact of non-underlying cash flows
from operating activities, adding dividends we receive from
joint ventures and associates and deducting net interest, net
capital expenditure on tangible and intangible asset purchases,
capital elements of lease repayments and the purchase of own
shares to satisfy share awards.
Invested Capital
Invested Capital represents the assets and liabilities considered
to be deployed in delivering the trading performance of the
business. Invested Capital assets are: goodwill and other
intangible assets; property, plant and equipment; interests in
joint ventures and associates; contract assets, trade and other
receivables; and inventories. Invested Capital liabilities are
contract liabilities, trade and other payables. Invested Capital is
calculated as a two-point average of the opening and closing
balance sheet positions. The Invested Capital of the Group used
in underlying ROIC are for those items for which resources are
or have been committed. This excludes right of use assets
recognised under IFRS 16 Leases as many have termination
options and commitments for expenditure in future years.
Lost Time Incident Frequency Rate (LTIFR)
Lost Time Incidents (LTIs) are incidents when personal injury
accidents at work, or when travelling on company business,
cause an employee to incur one or more working days (or shifts)
absence as a result. LTIs are recorded from the date the incident
occurred, not from when time was lost. The LTIFR is calculated
using the total number of LTIs, normalised using the total
number of hours worked in the period. This provides a view on
the frequency of LTIs, regardless of movements in staff
numbers, which is comparable across all areas where LTIs are
incurred. Minor revisions can be made to prior reported
performance based on data received post publication date.
Net debt
Net debt is a measure to reflect the net indebtedness of the
Group and includes all cash and cash equivalents and any debt
or debt-like items, including any derivatives entered into in
order to manage risk exposures on these items. Net debt brings
together the various funding sources that are included on the
Group’s Consolidated Balance Sheet and the accompanying
notes. Net debt includes all lease liabilities, while Adjusted Net
Debt is derived from net debt by excluding liabilities associated
with leases.
Non-underlying items
Included in non-underlying items are
• exceptional items (see above)
• amortisation and impairment of intangibles arising on
acquisitions, because these charges are based on
judgements about the value and economic life of assets that,
in the case of items such as customer relationships, would not
be capitalised in normal operating practice.
• Profit or losses on disposal of subsidiaries are excluded,
because such transactions represent discrete, non-recurring
events outside the ordinary course of the Group’s ongoing
operating activities.
Glossary
Serco Group plc | Annual Report and Accounts 2025 | 236
Non-underlying tax
Non-underlying tax refers to the tax effects of non-underlying
items, along with tax items that are themselves considered
non-underlying because they arise from discrete, non-recurring
events outside the Group’s ordinary operating activities.
Order book
The order book reflects the estimated value of future revenue
based on all existing signed contracts, excluding Serco’s share of
joint ventures and associates. It excludes contracts at the preferred
bidder stage and excludes the award of new Multiple Award
Contracts (MACs), Indefinite Delivery/Indefinite Quantity (IDIQ)
contracts or framework vehicles, where Serco cannot estimate with
sufficient certainty its expected future value of specific task orders
that may be issued under the IDIQ or MAC. In these situations the
value of any task order is recognised within the order book when
subsequently won. The definition is aligned with IFRS 15
disclosures of the future revenue expected to be recognised from
the remaining performance obligations on existing contractual
arrangements and therefore excludes unsigned extension periods
and option periods in our US business. Order intake is the value of
business which has been won during the year and typically
includes Serco’s share of order intake from its joint ventures and
option periods in our US business.
Organic
Organic measures exclude the impact of relevant acquisitions
(MT&S, European Homecare and Climatize) or disposals (Serco
Hong Kong and Khadamat). The prior year figures are recalculated
on a consistent basis with the relevant acquisitions or disposals
removed in the current or prior year and therefore may not agree
to the organic revenue previously reported.
Pipeline of large new bid opportunities
Pipeline of large new bid opportunities reflects the estimated
aggregate value at the end of the reporting period of new bid
opportunities with Annual Contract Value (ACV) greater than
£10m and which we expect to bid and be awarded within a
rolling 24-month timeframe. It does not include re-bids or
extensions of existing business and the Total Contract Value
(TCV) of individual opportunities is capped at £1bn; also
excluded is the potential value of framework agreements,
prevalent in the US in particular where there are numerous
arrangements classed as IDIQ. In this case only the potential
value of any individual task order is included.
Revenue plus share of joint ventures and associates
This alternative measure includes the share of revenue from
joint ventures and associates for the benefit of reflecting the
overall change in scale of the Group’s ongoing operations,
which is particularly relevant for evaluating Serco’s presence in
market sectors such as Defence and Transport. The alternative
measure allows the performance of the joint venture and
associate operations themselves, and their impact on the Group
as a whole, to be evaluated on measures other than just the
post-tax result.
Trading cash conversion
In order to calculate an appropriate cash conversion metric
equivalent to UOP, trading cash flow is derived from FCF by
excluding capitalised finance costs, interest, non-cash Research
and Development expenditure and tax items. Trading cash
conversion therefore provides a measure of the efficiency of the
business in terms of converting profit into cash before taking
account of the impact of capitalised finance costs, interest, non-
cash R&D expenditure, tax and non-underlying items.
Underlying Earnings Per Share (EPS), diluted
Underlying EPS reflects the Underlying Operating Profit
measure after deducting underlying net finance costs and tax. It
takes into account any non-controlling interests share of the
result for the period, and divides the remaining result that is
attributable to the equity owners of the Company by the
weighted average number of ordinary shares outstanding,
including the potential dilutive effect of share options, in
accordance with IFRS. Underlying net finance costs and tax are
used to calculate Underlying EPS to remove the impact of
typical non-recurring or out of period items.
Underlying Operating Profit (UOP)
Underlying Operating Profit is defined as IFRS Operating Profit
excluding non-underlying items (as described above).
Consistent with IFRS, it includes Serco’s share of profit after
interest and tax of its joint ventures and associates.
Underlying Return on Invested Capital (ROIC)
ROIC is calculated as UOP for the period divided by the
Invested Capital balance (as described above).
Glossary continued
Serco Group plc | Annual Report and Accounts 2025 | 237
2025 Impact performance and data disclosure
Here we share select ESG data points relevant to our ESG Framework. A larger suite of ESG data is available in our
2025 ESG Data Book, which is available on the Impact section on our website. The ESG Data Book is supported by
two basis of reporting documents, which set out our reporting approach including the criteria we apply to our non-
financial reporting. One covers the scope of our Environment (Planet) indicators, and the second our Social and
Governance (People, Place and Governance) indicators.
We have engaged Grant Thornton UK LLP to provide independent, limited assurance over selected Social and
Governance KPIs, shown below, in accordance with ISAE 3000 (revised) for the year ended 31 December 2025. Grant
Thornton has issued an unqualified opinion over the data and the full assurance report is available on our website.
Accenture provide independent, reasonable assurance over our Environmental KPIs in accordance with ISO 14064-3:2019
for the period 1 October 2024 to 30 September 2025, and their assurance statement is also available on our website.
l l l
¡
Trend key:
Positive Steady Negative New (no comparison)/non-indicator (statement)
Externally assured: GT = Grant Thornton UK LLP Acc = Accenture
Indicator/Disclosure Units 2024 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
People
Safe operations: Health and safety is a core business priority for Serco. Our people serve society in some of the most physically
and psychologically demanding situations and environments on the planet. The following KPIs enable us to monitor safety
consistently across the business while maintaining sharp focus on key areas of risk.
Lost Time Incidents Number 475 370 -105 -22
l
GT 1
Lost Time Incident Frequency Rate (LTIFR)
Per 1m hours
worked
4.89 3.60 -1.29 -26.38
l
GT 2
Fatalities (work related) Number 1 0 -1 -100
l
GT
Fatal Incident Frequency Rate (FIFR)
Per 1m hours
worked
0.01 0.00 -0.01 -100
l
GT
Safety and wellbeing – notes and commentary
1. Number of Lost Time Incidents has been included this year related to ambition set out in 2024.
2. 2024 values restated to reflect adjustments to 2024 data identified in 2025 (3 additional Lost Time Incidents).
Indicator/Disclosure Units 2024 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
People continued
Diverse workforce and inclusive workplace: At Serco, we are working to create fairer and more inclusive environments for all colleagues,
and the communities that we serve. The following KPIs demonstrate progress against our DEI commitments, aligned to reporting
requirements.
Age profile – Serco Group plc Board
16–24 % 0.0 0.0 0.0 0.0
o
25–40 % 0.0 0.0 0.0 0.0
o
41–54 % 10.0 9.1 -0.9 -9.0
o
55–64 % 60.0 54.5 -5.5 -9.2
o
65+ % 30.0 36.4 6.4 21.3
o
Undisclosed % 0.0 0.0 0.0 0.0
o
Our Impact - Data Tables
Serco Group plc | Annual Report and Accounts 2025 | 238
Indicator/Disclosure Units 2024 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
Gender diversity – Global Leadership Team –
women
% 34.6 34.0 -0.6 -1.7
l
GT
Gender diversity – Global Executive Committee
and direct reports – women
% 42.2 40.9 -1.3 -3.1
l
GT
Gender diversity – Serco Group All other employee
levels – women
% 43.8 45.0 1.2 2.7
l
GT
Gender diversity – All other employee levels –
women
Number 20,711 20,134 -577 -2.8
o
GT 1
Gender diversity – All other employee levels –
men
Number 26,532 24,437 -2,095 -7.9
o
GT 1
Gender diversity – All other employee levels –
notdisclosed
Number 94 123 29 30.9
o
GT 1
UK Gender Pay Gap (Median) % 5.16 4.25 -0.91 -17.64
l
GT
Ethnicity – All employees
Asian % 5.0 5.9 0.9 18.0
o
GT
Black % 5.7 6.7 1.0 17.5
o
GT
Mixed % 1.8 2.0 0.2 11.1
o
GT
Other % 5.9 6.3 0.4 6.8
o
GT
White % 39.8 45.6 5.8 14.6
o
GT
Undisclosed % 41.9 33.4 -8.5 -20.3
o
GT
Our Impact – Data Tables continued
Serco Group plc | Annual Report and Accounts 2025 | 239
Colleague experience: We are committed to supportively maintaining a resilient and motivated workforce in a challenging world.
We monitor colleague engagement through metrics aligned to our annual colleague engagement survey, as well as through
broader measures aligned to colleague experience, including attraction and retention.
Colleague engagement: All areas Avg. score 72 71 -1 -1.4
l
GT
New hires Number 16,670 13,551 -3,119 -18.7
o
GT
Staff turnover % 30.8 33.9 3.1 10.1
l
GT
Staff turnover – voluntary % 21.1 18.6 -2.5 -11.8
l
GT
Colleagues covered by collective bargaining
agreements
% 42.4 38.4 -4.0 -9.4
l
GT
Indicator/Disclosure Units 2024 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
People – notes and commentary
1. Gender diversity across Serco at all employee levels is influenced by contract wins and losses.
Indicator/Disclosure Units 2024 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
Place
Community impact: Serco and our people are committed to supporting local communities not just through the services we deliver
but through volunteering, corporate donations and sponsorship, The Serco Foundation and The Serco People fund.
Community Investment £ Number 359,040 315,215 -43,825 -12
l
GT 1
Serco Foundation – grants made £ Number 56,476 621,507 565,031 1000
l
GT 2
Serco Foundation – charities supported Number 6 45 39 650
l
GT 2
Serco People Fund – grants made £ Number 568,108 549,959 -18,149 -3
l
GT 3
Serco People Fund – colleagues supported Number 359 347 -12 -3
l
GT 3
Place – notes and commentary
1. Community Investment KPI included for 2025. This includes monetary donations, gifts-in-kind and cash equivalent of employee volunteering in paid time.
2. For more information on the Serco Foundation, go to www.sercofoundation.org.
3. For more information on the Serco People Fund, go to www.sercopeoplefund.org.
Our Impact – Data Tables continued
Serco Group plc | Annual Report and Accounts 2025 | 240
Planet
Carbon dioxide equivalent (Scope 1 and
2) market-based Scope 2 – Total Group
tCO
2
e 42,400 30,008 28,873 -1,135 -4
l
Acc 1, 2
Total UK tCO
2
e 21,744 16,609 15,500 -1,109 -7
l
Acc 1
Total Rest of World tCO
2
e 20,656 13,399 13,373 -26 0
l
Acc 1
Carbon dioxide equivalent (Scope 1 and
2) location-based Scope 2 – Total Group
tCO
2
e 50,237 42,072 35,839 -6,233 -15
l
Acc 1
Total UK tCO
2
e 28,921 24,403 19,993 -4,410 -18
l
Acc 1
Total Rest of World tCO
2
e 21,316 17,669 15,846 -1,823 -10
l
Acc 1
Combustion of fuels and operation of
facilities (Scope 1) – Total Group (all fuel
types)
tCO
2
e 34,533 30,008 28,873 -1,135 -4
l
Acc 1
Total UK (all fuel types) tCO
2
e 21,531 16,609 15,500 -1,109 -7
l
Acc 1
Total Rest of World (all fuel types) tCO
2
e 13,002 13,399 13,373 -26 0
l
Acc 1
Combustion of fuels and operation of
facilities (Scope 1) – Total Group (all fuel
types)
MWH 139,417 126,911 127,775 864 1
l
Acc 1
Total UK (all fuel types) MWH 86,782 73,338 70,881 -2,457 -3
l
Acc 1
Total Rest of World (all fuel types) MWH 52,635 53,573 56,894 3,321 6
l
Acc 1
Scope 2 – Grid electricity purchased/
acquired for own use (market-based) –
Total Group
tCO
2
e 7,866 0 0 0 0
l
Acc 1
Total UK tCO
2
e 213 0 0 0 0
l
Acc 1
Total Rest of World tCO
2
e 7,653 0 0 0 0
l
Acc 1
Scope 2 – Grid electricity purchased/
acquired for own use (location-based) –
Total Group
tCO
2
e 15,704 12,064 6,966 -5,098 -42
l
Acc 1
Total UK tCO
2
e 7,390 7,794 4,493 -3,301 -42
l
Acc 1
Total Rest of World tCO
2
e 8,313 4,270 2,473 -1,797 -42
l
Acc 1
Scope 2 – Grid electricity purchased/
acquired for own use – Total Group
MWH 56,275 48,271 33,739 -14,532 -30
l
Acc 1
Total UK MWH 38,071 37,645 25,398 -12,247 -33
l
Acc 1
Total Rest of World MWH 18,203 10,626 8,340 -2,286 -22
l
Acc 1
Headcount intensity (Scope 1 and 2)
market-based Scope 2
tCO
2
e/
FTE
0.73 0.57 0.52 -0.05 -8.77
l
Acc 1, 3
Headcount intensity (Scope 1 and 2)
location-based Scope 2
tCO
2
e/
FTE
0.86 0.80 0.64 -0.16 -20.00
l
Acc 1, 3
Financial intensity (Scope 1 and 2)
market-based Scope 2
tCO
2
e/
per £m
revenue
9.33 6.24 5.92 -0.32 -5.13
l
1, 3
Financial intensity (Scope 1 and 2)
location-based Scope 2
tCO
2
e/
per £m
revenue
11.05 8.74 7.35 -1.39 -15.90
l
1, 3
Total energy consumption Scope 1 and
2 – Total Group
MWH 195,692 175,181 161,513 -13,668 -8
l
Acc
1
Indicator/Disclosure Units
2022
Restated
2024
Restated 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
Our Impact – Data Tables continued
Serco Group plc | Annual Report and Accounts 2025 | 241
Planet continued
Total UK MWH 124,853 110,982 96,279 -14,703 -13
l
Acc 1
Electricity consumption, renewable
sources
% 66.9 100.0 100.0 0 0.0
l
Acc 1, 4
Electricity consumption, renewable
sources
MWH 37,638 48,271 33,739 -14,532 -30
l
Acc 1, 4
Electricity consumption, non-renewable
sources
MWH 18,637 0 0 0 0
l
Acc 1, 4
Fuel consumption, renewable sources % 2.45 4.33 6.53 2.20 50.81
l
Acc 1, 4
Fuel consumption, renewable sources MWH 3,415 5,501 8,340 2,839 52
l
Acc 1, 4
Fuel consumption, non-renewable sources MWH 136,002 121,410 119,435 -1,975 -2
l
Acc 1, 4
Scope 3 supply chain tCO
2
e 447,722 428,507 453,160 24,653 6
l
Acc 2, 6, 8
Suppliers with science-based targets % NA 15 10 -5 -33
l
6
Scope 3 business travel and fuel-and
energy-related
tCO
2
e 29,830 28,818 22,181 -6,637 -23
l
Acc 1, 7
Transition to greener fleet – proportion
of hybrid and electric vehicles
% 25 35 39 4 11
l
4
Proportion of operating locations
exposed to 1:100 year climate-related
hazard – flooding
% 12 12 12 0 0
l
5
Impact of carbon taxes and levies –
electricity and gas
£‘000 781 988 818 -170 -17
l
4
Operations covered by certified ISO
14001 EMS – by revenue
% 28 28 28 0 0
l
9
Operations covered by certified ISO
50001 EMS – by revenue
% 0.5 0.9 0.9 0 0
l
9
Indicator/Disclosure Units
2022
Restated
2024
Restated 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
Planet – notes and commentary
Our reporting year for greenhouse gas (GHG) emissions is one quarter behind our financial year, namely 1 Oct 2024 to 30 Sept 2025. See our Planet Basis of
Reporting Supplement for information on our reporting boundary and methodologies, available on the Impact section on our website. We quantify and report
GHG emissions using the financial control approach in line with the World Resources Institute’s Greenhouse Gas Protocol Corporate Accounting and Reporting
Standard. We report all material emission sources for which we consider ourselves responsible and have set our materiality threshold at 5%. We have recalculated
and restated emissions and associated energy data for 2022-2024 to account for structural changes, data improvements and changes to GHG calculation
methodologies, in line with our base year emissions recalculation policy and best practice to ensure a meaningful and accurate comparison of emissions data over
time. 2022 is the base year for our Net Zero targets which were validated by the Science Based Targets initiative in 2024.
1. 2022–2024 data recalculated and restated in line with our base year emissions recalculation policy and best practice. Significant changes included data
improvements to North America fleet data due to telematics data availability, revised business travel emissions calculation methodology for North America
reviewed by Accenture, updated air travel emission factors, as well as smaller data, methodology and emission factor updates and errors.
2. SBTi target: We have reduced Scope 1 and 2 emissions by 32% in 2025 versus our restated 2022 base year, with reductions resulting from a focus on
operational and energy efficiency, maintaining 100% renewable sourced electricity, switching to greener fleet and fuels, and improvement in data quality.
TCFD: Linked to disclosed risks on carbon pricing and reputation.
3. TCFD: Linked to disclosed risks on carbon pricing and reputation.
4. TCFD: Linked to disclosed risks on carbon pricing and reputation. Internal target to retain 100% renewable sourced electricity.
5. TCFD: Linked to disclosed risk from extreme weather based on 2022 analysis. Considering further physical climate risk analytics support in 2026.
6. SBTi target: 95% of suppliers by emissions to have science-based targets by 2028. Drop from 15% in 2024 to 10% in 2025. Supplier engagement campaigns
are ongoing noting changes to SBTi Net Zero Standard are anticipated to include afocus on relevance and influence rather than percentagethresholds. TCFD:
Linked to disclosed opportunity on Net Zero enabling services and carbon pricing.
7. SBTi target: 25% reduction in business travel and fuel and energy-related Scope 3 emissions by 2030. In 2025, our emissions decreased by 26% vs 2022,
significant changes in air travel emission factors contributed to this reduction as well as our new global travel and expenses policy.
8. For many companies Scope 3 emissions form the majority of emissions with supply chain categories (Purchased Goods and Services, Capital Goods and
Upstream Transportation and Distribution) collectively being the most significant. In 2025, we introduced Green Project Technologies, a leading supply chain
technology platform supporting the measurement of Scope 3 supply chain emissions and scalable supplier engagement.
9. All contracts are required to comply with our Serco Management System and environmental requirements, which align with ISO 14001. At many of our
contracts we also operate within customer ISO 14001 certified management systems. A smaller proportion of our contracts have certified ISO 50001
management systems, as only our more energy-intensive operations benefit from this standard. TCFD: Linked to disclosed risk on reputation.
Our Impact – Data Tables continued
Serco Group plc | Annual Report and Accounts 2025 | 242
Streamlined energy and carbon reporting commentary
We continue to support energy-saving activity across our customers and our own assets. For example, where we deliver facilities management services, we
continue to seek to embed energy efficiency measures such as the investment in a new energy management system in 2025 in the UK. Our ongoing focus and
transition to electric vehicles and more efficient internal combustion engine vehicles is vital to help meet our Science Based Targets and reduce associated energy
consumption. At our NorthLink Ferries contract, one of our most energy and carbon intensive, we have mandatory ship energy efficiency management plans in
place and monitoring systems to support efficiencies and reporting requirements. We have prepared the Aberdeen vessels to accept shore power from a
renewable energy tariff following the commitment of funding from Caledonian Maritime Assets Limited (CMAL) and the Port of Aberdeen to install shore power
facilities for Serco’s two passenger ferries. This initiative is expected to be operational in 2026 and removes the need to run oil-fired generators to power the
vessels when docked, reducing carbon emissions, improving air quality, and reducing noise. Preliminary discussions have also been held with relevant
stakeholders on alternative low-carbon fuels for use later in the life of the vessels; we will continue to review these options in future.
Indicator/Disclosure Units 2024 2025
2025
versus
2024 Var % Trend
Externally
Assured Notes
Governance
Ethics and integrity: A better future can only be achieved on a firm foundation of integrity and fair, ethical behaviour. We strive to
hold firm to our Values and act with integrity in all that we do. We monitor a broad range of KPIs to demonstrate our positive
reporting culture and our commitment to investigate each Speak Up allegation thoroughly, confidentially and in a manner to
prevent retaliation.
Colleague engagement: Ethical Standards Avg. score 76 76 0 0
l
GT
Colleague engagement: Psychological Safety Avg. score 74 71 -3 -4
l
GT 1
Speak Up Case rate
Per 100
employees
1.30 1.15 -0.15 -11.54
l
GT
Speak Up cases reported anonymously % 60.5 54.1 -6.4 -10.6
l
GT
Speak Up closed case substantiation rate % 38.8 45.4 6.6 17.0
l
GT 2
Substantiated Speak Up cases with corrective
action taken
% 93 93 0 0
l
GT
Prosecutions for corrupt behaviour Number 0 0 0 0
l
Prosecutions for anti-competitive behaviour Number 0 0 0 0
l
Lobbying payments £'000 392 262 -130 -33
o
GT 3
Respecting human rights: We have zero tolerance to pursue activity that breaks any law relating to human rights; and we believe
that we can contribute positively to upholding human rights through the services we deliver. We closely monitor cases reported
through Speak Up and ensure effective screening of modern slavery within our supply chain.
Prosecutions for human rights violations
(including indigenous, modern slavery, etc.)
Number 0 0 0 0.0
l
GT
Case rate substantiated human rights and
modern slavery Speak Up cases
Per 100
employees
0 0 0 0.0
l
GT
Tier 1 supplier enhanced modern slavery
assessment completion
% 7.5 16.9 GT 4
Data protection and information security: We are committed to delivering secure services and protecting the data we collect, store
and process. Our core KPIs focus not only on significant data breaches but also complaints we receive, in line with the GRI framework.
Substantiated complaints received from data
protection regulators
Number 2 6 4 200
l
GT 5
Significant data breaches Number 0 0 0 0
l
GT
Governance – notes and commentary
1. Colleague engagement: Psychological Safety replaced Colleague engagement; Reporting Unethical Conduct’ question used in prior years.
2. The calculation for Speak Up closed case substantiation rate has been adjusted in 2025 to remove ‘referred’ cases to better align with comparable benchmarks,
both 2024 and 2025 adjusted to reflect this change.
3. We use lobbyists to perform advocacy or interact with Public Officials on behalf of Serco. All lobbyists are subject to due diligence prior to being engaged.
They operate to an agreed contract in line with local laws, including standard clauses covering a range of compliance matters, and stating services and fees.
Payments are reviewed to ensure compliance with contracts.
4. Tier 1 supplier enhanced modern slavery assessment completion calculation adjusted to align both numerator and denominator on suppliers onboarded in the
current year. It has not been possible to recalculate 2024 value thus no variance/trend shown.
5. Globally, in 2025, we have had six substantiated complaints from data protection regulators; four in the UK relating to subject access requests and two in Asia
Pacific relating to minor data breaches.
Our Impact – Data Tables continued
Serco Group plc | Annual Report and Accounts 2025 | 243
Our website
The Company’s website, www.serco.com, provides
access to share price information as well as sections
onmanaging your shareholding online, corporate
governance and other investor relations information.
Shareholder queries
Our share register is maintained by our Registrar,
Equiniti. Shareholders with queries relating to their
shareholding should contact Equiniti directly either
viathe website below using the ‘Help’ section or by
postor telephone:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
United Kingdom
Telephone: +44 (0)371 384 2932
Lines are open 8.30am to 5.30pm Monday to Friday
(excluding public holidays in England and Wales)
Website: www.shareview.co.uk
American Depositary Receipts (ADRs)
Serco has established a sponsored Level I ADR programme.
Serco ADRs are traded on the US over-the-counter
market(SCGPY). For queries relating to your ADR
holding, please contactour ADR depositary bank:
Deutsche Bank Trust Company Americas
Peck Slip Station
PO Box 2050
New York NY10272-2050
USA
Telephone: +1 866 249 2593 (toll-free within USA)
+1 718 921 8124 (from outside USA)
Email: adr@equiniti.com
Website: www.adr.db.com
Managing your shares online and electronic
communications
Shareholders can manage their shareholding including
updating contact details online and receive their
communications electronically for speed and security.
Please register at www.shareview.co.uk
Unsolicited mail and shareholder fraud
Shareholders are advised to be wary of unsolicited mail
or telephone calls offering free advice, to buy shares at
adiscount or offering free company reports. For further
information on how shareholders can be protected from
investment scams visit www.fca.org.uk/scamsmart
Sharegift
If you have a very small shareholding that is uneconomical
to sell, you may want to consider donating it to Sharegift
(Registered Charity no.1052686), a charity that specialises
in the donation of small, unwanted shareholdings to
goodcauses. You can find out more by visiting
www.sharegift.org or by calling +44 (0)207 930 3737.
Dividend
The Directors are recommending a final dividend of
3.05pence per ordinary share in respect of the year
ended 31 December 2025 to be paid on 8May 2026
toshareholders on the register as at 10April 2026,
subject to approval by shareholders at the 2026 AGM.
Shareholders are encouraged to receive dividends
directly to their bank or building society as it enables you
to receive your dividend in your account on the payment
day; it is a more efficient and secure way of receiving
your payment; and it helps reduce the volume of paper
in a dividend mailing.
Mandate forms are available at www.shareview.co.uk
Financial calendar
The following dates have been announced or
areindicative:
2026 AGM: 22April 2026
Final dividend:
• Ex-dividend date: 9April 2026
• Record date: 10April 2026
• Payment date: 8May 2026
Serco’s registered office
Serco House, 16 Bartley Wood Business Park,
Bartley Way, Hook, Hampshire, RG27 9UY
United Kingdom.
The Company was registered in England and Wales
no. 02048608 .
Notification of major interests in shares
Email: cosec@serco.com
External Auditor
Ernst & Young LLP
Shareholder information
Serco Group plc | Annual Report and Accounts 2025 | 244
Legal Disclaimer
This Annual Report and Accounts contains statements which are, or
may be deemed to be, “forward-looking statements” which are
prospective in nature. All statements other than statements of
historical fact are forward-looking statements. Generally, words such
as expect”, “anticipate”, “believe”, “estimate”, “may”, “could”,
“should”, “will”, “continue”, “aspire” “aim”, “plan”, “target”, “goal”,
“ambition”, “intend” or, in each case, their negative or other
variations or comparable terminology identify forward-looking
statements. By their nature, these forward-looking statements are
subject to a number of known and unknown risks, uncertainties and
contingencies, and actual results and events may differ materially
from those currently anticipated in such statements. Factors which
may cause future outcomes to differ from those foreseen or implied
in forward-looking statements include, but are not limited to:
general economic conditions and business conditions in Serco’s
markets; contracts awarded to or lost by Serco; customers’
acceptance of Serco’s products and services; operational problems;
the actions of competitors, trading partners, creditors, rating
agencies and others; the success or otherwise of partnering;
changes in laws or governments or to governmental regulations;
regulatory or legal actions, including the nature of any enforcement
action or remedies sought or imposed; the receipt of relevant third
party and/or regulatory approvals; exchange rate fluctuations; the
development and use of new technology; changes in public
expectations or behaviour and other changes to business
conditions; wars and acts of terrorism; cyber-attacks; climate
change and related regulatory developments; and pandemics,
epidemics or natural disasters. Many of these factors are beyond
Serco’s control or influence. Forward-looking statements are not
guarantees of future performance.
For a description of the principal risks and uncertainties that may
affect Serco’s business, financial performance or results of
operations, please refer to the Principal Risks and Uncertainties set
out in this Annual Report and Accounts. These forward-looking
statements are based on information available, and assumptions
made, as of the date of this Annual Report and Accounts and have
not been audited or otherwise independently verified. Past
performance should not be taken as an indication or guarantee of
future results and no representation or warranty, express or implied,
is made in relation to future performance or otherwise. Except as
required by any applicable law or regulation (including under the
UK Listing Rules and the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority), Serco expressly disclaims
any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained in this Annual
Report and Accounts to reflect any change in Serco’s expectations
or any change in events, conditions or circumstances on which any
such statement is based after the date of this Annual Report and
Accounts, or to keep current any other information contained in this
Annual Report and Accounts. Accordingly, undue reliance should
not be placed on the forward-looking statements. Any references
inthis Annual Report and Accounts to other reports or materials,
including website addresses, are for the reader’s interest only.
Neither the content of Serco’s website nor any website accessible
from hyperlinks from Serco’s website, including any materials
contained or accessible thereon, are incorporated in or form
partofthis Annual Report and Accounts. Serco is subject to the
regulatory requirements of the Financial Conduct Authority of
theUnited Kingdom.
Printed on material from well-managed, FSC® certified forests and other
controlled sources.
100% of the inks used are HP Indigo ElectroInk which complies with
RoHS legislation and meets the chemical requirements of the Nordic
Ecolabel (Nordic Swan) for printing companies, 95% of press chemicals
are recycled for further use and, on average 99% of any waste associated
with this production will be recycled and the remaining 1% used to
generate energy.
The paper is Carbon Balanced with World Land Trust, an international
conservation charity, who offset carbon emissions through the purchase
and preservation of high conservation value land. Through protecting
standing forests, under threat of clearance, carbon is locked-in, that
would otherwise be released.
