# Serco Group plc (SRP.L) fundamentals

Data as of 2026-09-08. LSE, United Kingdom. Sector: Industrials / Professional Services. Price 251p, market value 2.4 billionp.

## Valuation
- **P/E (trailing): 16.7×** (5-yr avg 1667.6×, 3-yr avg 2194.4×). Serco Group plc trades at 16.7× trailing earnings, well below its own five-year average of 1667.6×: cheap by its own standards. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 12.3×, lower than trailing, so analysts expect earnings to grow.
- **PEG: 0.05**. A PEG of 0.05 means the P/E is low relative to expected earnings growth: the market is not paying much for that growth.
- **Price / sales: 0.3×**. Each dollar of revenue is priced at 0.3×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 2.9×**. The shares trade at 2.9× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 4.2×**. Enterprise value is 4.2× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 33.5%** (5-yr avg 0.2%). Free cash flow equals 33.5% of the market value, above its five-year average of 0.2%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 6.0%**. The inverse of the P/E: 6.0% of the price is earned each year.

## Profitability
- **Gross margin: 10.9%**. Serco Group plc keeps 10.9% of revenue after the direct cost of what it sells, a thin margin typical of retail, distribution and commodity businesses.
- **Operating margin: 5.7%**. 5.7% of revenue is left after running the business.
- **Net margin: 3.0%**. 3.0% of each dollar of sales reaches the bottom line.
- **Return on equity: 16.7%**. 16.7% on shareholders' equity is solid.
- **Return on invested capital: 22.3%**. Return on all capital, debt included, is 22.3%: comfortably above what that capital costs.
- **Return on assets: 6.8%**. Each dollar of assets produces 6.8% of profit.

## Growth
- **Revenue growth (1 yr): 1.9%** (3-yr 2.5%/yr, 5-yr 4.7%/yr). Revenue grew 1.9% over the last year, against 4.7% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): 241.5%** (3-yr 2.5%/yr, 5-yr 4.9%/yr). Earnings per share rose 241.5%, faster than revenue, so margins expanded or the share count shrank.
- **Free-cash-flow growth (3 yr): 9.6%/yr**. Free cash flow has compounded at 9.6% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 1.04**. Debt is 1.04 times equity, a leveraged balance sheet that needs steady cash flow to service.
- **Net debt / EBITDA: 0.9×**. It would take 0.9 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 6.0×**. Operating profit covers interest 6.0× over, a safe margin.
- **Current ratio: 0.93** (quick 0.91). Current liabilities exceed current assets, so the company depends on ongoing cash generation or refinancing to pay the next year's bills.
- **Altman Z-score: 3.26**. A Z-score of 3.26 places the company in the safe zone for bankruptcy risk.
- **Piotroski F-score: 7/9**. 7 of 9 fundamental checks pass: strong and improving financials.

## Dividends
- **Dividend yield: 1.84%** (0p per share, trailing). Serco Group plc yields 1.84%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 30%** (10% of free cash flow). 30% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 5**. 5 straight years of increases.
- **Shareholder yield: 11.6%**. Dividends plus net buybacks return 11.6% of the market value a year.

## Analyst view
- **Analyst consensus: buy** (12 analysts). 12 analysts cover Serco Group plc; the consensus is buy, with an average price target of 314p (+25% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 13.7%** (YTD -9.4%, 3-mo -0.2%). The shares are up 13.7% over twelve months including dividends.
- **From 52-week high: -22.9%** (18.0% above the low). Trading 23% below its 52-week high.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 46**. An RSI of 46 is neutral.
- **Beta (1 yr): 0.62** (volatility 23%). Beta of 0.62 against the FTSE All-Share: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=SRP.L · Page: https://foliofundamentals.com/stocks/srp.l

Not investment advice.