Three developing stories at the UK stock market open.
1. Serco dividends up but outlook clouded by contract losses
The outsourcing specialist Serco LON:SRP has published full year results this morning which show a modest dip in reported revenues but a strong gain for underlying operating profits. Investors will see a 22% uptick in dividends but it’s the forward looking picture that’s likely to be the point of focus. Losses on immigration contracts in both Australia and the UK are set to be replaced by organic revenue growth elsewhere and there’s a strong pipeline of work in place but will the flat income outlook for 2025 weigh?
2. Ocado cashflow set to turn positive by FY26
Numbers for the full year from Ocado LON:OCDO are also out today but whilst revenues are up 14% and EBITDA has trebled, statutory losses remain stubborn. There’s an expectation that the business will reach positive cashflow in FY26 with good progress being seen across all divisions and the liquidity position is set to remain strong.
3. Taylor Wimpey LON:TW. selling prices fall, near term outlook remains tough
And full year numbers are also out from the housebuilder Taylor Wimpey. Completions for FY24 were broadly flat although there was a notable decline in average selling prices. The year end net cash position was however ahead of guidance owing to the timing of land sales and shareholders are going to see full year dividends trimmed fractionally to keep pace with the company’s cash returns policy. Management notes a strong start to the spring selling season and completion numbers for FY25 are forecast as being slightly higher.
