Austerity in the UK and a coming US presidential election have hit profits at Serco, the outsourcing giant behind London's "Boris Bikes".
Delays to government spending have hit the flow of public sector work in Serco's core British market, which represents about half of group profit.
And the race between Mitt Romney and Barack Obama has choked spending plans in the US, leading to delays in contracts.
That combined to lead to a 17 per cent fall in half-year profits to £102.1m. On the upside, Serco landed £4.2bn in new contracts over the period.
Chief executive Christopher Hyman said: "While significant challenges in the US remain, we see conditions in the UK starting to improve."
The company raised the interim dividend to 2.65p a share.