Serco continues to battle tough markets

Traders wait to see what guidance Serco will offer in its Friday statement.

A Northern Rail train operated by Serco Group
Source: Bloomberg

Serco is one of the equities in the FTSE that has an extensive global exposure with business interests in Europe, the Middle East, Asia, Australasia and Africa. As such, it has an increased exposure to the currencies and political stability in these regions.

Serco will be hoping for more stability in its board room now that Rupert Soames has been CEO for over a month. The company’s acquisition of him from Aggreko was seen as a bit of a coup, and it is expected that a more focused and profitable company will be the net result.

His first actions in changing the company’s reporting structure appear to have set a template of greater centralised control. It is likely that this week’s statement could provide a little more clarity on the company’s direction. However, this early in a turn around it is unlikely we will see these changes reflected in company figures.

Shares in Serco hit a five-year low in April, and once again the 320p region has offered embattled shareholders a little support. The 50-day moving average has suppressed the shares for several months, and filling the gap back to 400p will need to be the first order of action.

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