Serco expects 2019 revenue rebound helped by foreign growth

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By Elisabeth O'Leary

EDINBURGH, Feb 21 (Reuters) - British outsourcing firm Serco raised its 2019 profit and revenue forecasts on Thursday buoyed by a run of recent contract wins despite what CEO Rupert Soames called "the fog of Brexit".

It expects profit of about 105 million pounds, above its previous guidance of 95-100 million, on revenue of 2.9-3 billion pounds, up from 2.8-2.9 billion pounds.

Serco, which provides services such as administration, training and custody in public defence, justice, transport and health departments, said that 2018 underlying trading profit rose 40 percent in constant currency terms to 93.1 million pounds, meeting its recently raised targets.

Revenue fell 2 percent to 2.8 billion pounds, though growth turned positive in the second half.

Under Soames, a grandson of British wartime prime minister Winston Churchill, Serco has restructured, focusing on winning business abroad and cutting costs. That has allowed the company to weather a slowdown in British outsourcing caused in part by Brexit uncertainty and the collapse of major contractor Carillion last year.

The UK now provides two fifths of Serco's revenue versus around 55 percent in 2014.

Serco said it expects its 2019 revenue to rise by 3 to 4 percent and then by around 5 percent in 2020 as large foreign contracts start to boost results.

These include three in Australia -- running correctional centre Grafton in New South Wales, the design and construction of an icebreaker ship and health services in the defence sector, as well as a large UK asylum seekers' accommodation contract.

($1 = 0.7674 pounds) (Reporting by Elisabeth O'Leary; editing by David Goodman and Jason Neely)