This morning, G4S announced its half-yearly results covering the first two quarters of 2015. New contract sales have achieved a total value of £1.4 billion (annual value £0.7 billion), with contract retention rates maintained at approximately 90%. The sales pipeline is replenished to stand at £6 billion annual contract value.
Revenue from continuing operations is up 2.8% at £3,285 million, with emerging markets revenues rising by 5.7% to £1,183 million, duly representing an 8.7% increase.
Strong underlying growth is present in the Asia, Middle East and Latin American regions. North America is up 5.4% and Europe by 2%, although the UK figures are down 3.2%.
PBITA has increased by 4.9% to £193 million (2014: £184 million). Emerging markets are maintained at £87 million, developed markets up 3.2% to £129 million while corporate costs of £23 million represent a decrease of £5 million.
Cash from operating businesses was £195 million (2014: £185 million). This figure signifies a rise of 5%. Underlying earnings of £95 million (2014: £86 million) mean an increase of 10.5% while the interim dividend is up 5% to 3.59 pence per share. Net debt as at June 2015 was £1,677 million, the 2014 equivalent figure being £1,680 million.
Commenting on this latest set of financials, G4S CEO Ashley Almanza said: “We continue to make good progress with our strategic plans, investing in growth and productivity programmes which have underpinned strong development in our pipeline and a 10.5% increase in underlying earnings. We’ve won new contracts with a total value of £1.4 billion. New contract mobilisation and ongoing productivity programmes have provided increasingly good momentum through the first half of this year. This is expected to deliver further improvements in the group’s performance during the second half of 2015.”
Since 2013, the company has divested 16 businesses for total gross proceeds of £263 million and is disposing of (or discontinuing) a further 30 businesses.
These 46 businesses have combined revenues of circa £1 billion and profit (PBITA) of £3 million on an annualised basis. Portfolio management remains important for strategic focus and capital discipline across the business.
“Since January,” continued Almanza, “we’ve won new work with an annual contract value of over £680 million and, as previously stated, a total contract value of £1.4 billion. In addition, there’s £2.2 billion of new work either in the bidding or negotiation stage that provides good support for future sales.”
In terms of productivity and the business’ Accelerated Best Practice Programmes, Almanza explained: “We have made progress with our investment in sales and business development capability, business restructuring, organisational and overhead efficiency, operational systems, procurement efficiency, IT systems and property rationalisation.”
As set out back in November 2013, the business is reinvesting efficiency gains into further revenue and productivity initiatives. The net benefit of the gains over investment is said to be “slightly ahead” of the company’s initial plans.