Serco lifts H1 margin to 10-year high as profit rises 8%

Serco reported H1 2026 revenue rose 4% to £2.5bn and operating profit increased 8%, lifting its margin to 6.2%, the highest in ten years. Shares rose 7.17% premarket. Underlying operating profit reached £157m, free cash flow was £65m, and the pipeline hit a record £12.8bn with retention above 95%. Serco raised its interim dividend 10% and expanded its 2026 buyback to £150m. Management cited better execution, higher-margin work, and demand in defence, justice, civil services, and healthcare. It reaffirmed full-year guidance and said the margin gains reflect sustainable quality improvements.