Home Guarding G4S reports on Full Year financial results for 12 months to 31 December 2018

G4S reports on Full Year financial results for 12 months to 31 December 2018

by Brian Sims

G4S has announced its Full Year financial results for the twelve months ended 31 December 2018. New contract wins total £1.4 billion (annual contract value), with Secure Solutions revenues growing by 3.1%. Cash Solutions revenues excluding Retail Cash Solutions rose by 0.5%. Operating cash flow conversion stands at 95.6% (2017: 106.6%).

G4S’ CEO Ashley Almanza commented: “Our Secure Solutions business delivered underlying revenue growth of 3% and profit margins rose from 6.2% to 6.5% reflecting the benefits of commercial discipline, growth in the sale of technology-enabled security and productivity gains. As expected, this was offset by the effect of challenging trading conditions in a number of Cash Solutions markets and a strong comparative performance in Retail Cash Solutions in 2017. Overall, the Group delivered underlying earnings in line with the previous year.”

Almanza went on to state: “Our sales wins in the second half of 2018 have underpinned a good start to the year and this, together with growing technology-enabled services in both our cash and security businesses, supports a positive outlook for 2019.”

During 2018, G4S continued to make substantial progress in a number of important areas. For example, the organisation continued to embed values that build a culture based on integrity, respect, safety, security, service, innovation and teamwork. Employee engagement surveys have shown positive identification with these values.

Ashley Almanza: CEO at G4S

Ashley Almanza: CEO at G4S

G4S’ Health and Safety goal is zero harm and the business has achieved a material reduction in serious incidents. It has also increased technology-enabled revenues to 45% of Secure Solutions, enhancing the customer proposition and reinforcing margins. Also, G4S has increased the deployment of cash technology to 23,300 customer locations (2017: 19,800) and implemented end-to-end IT systems for security guarding in the UK.

The business is on track to deliver £90 million-£100 million in cost savings by 2020 in order to support investment and margin improvement.

Almanza concluded: “We believe that the potential separation of the Cash Solutions business will provide G4S with the strategic, commercial and operational focus needed for the next stage of the successful development of both the Cash Solutions and Secure Solutions businesses.”

G4S Group: Financial results for 12 months ended 31 December 2018

Underlying Results Statutory Results
In Constant Currency Actual Rates
2018 2017 % 2018 2017 %
Restated Restated
Revenue £7,289 m £7,213 m +1.1 £7,512 m £7,826 m (4.0)
Adjusted PBITA £474 m £474 m £460 m £492 m (6.5)
Adjusted PBITA Margin 6.5% 6.6% 6.1% 6.3%
Earnings £259 m £258 m +0.4 £82 m £237 m (65.4)
Earnings Per Share 16.7 p 16.7 p 5.3 p 15.3 p (65.4)
Operating Cash Flow £453 m £516 m (12.2) £413 m £488 m (15.4)

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