Impressive 4.7% revenue increase posted by G4S in 2019 Half-Year financials

Global security company G4S has announced its financial results for the six-month period that ended on 30 June 2019. Secure Solutions revenues are up by 4.9% and those for Cash Solutions by 3.9%. The PBITA margin sits at 6.2% (2018: 6.4%). The positive impact of growth has been offset by new one-off contract mobilisation costs (£4 million in 2019) and a one-off bullion contract profit in 2018 of £8 million.

There’s an operating cash flow conversion of 88% (2018: 109%) with the expectation of a full-year conversion above 100%. Net debt to EBITDA is 2.85x (30 June 2018: 2.73x). Interim dividend is set at 3.59 pence per share (the exact same figure as per this time last year).

Statutory earnings of £59 million (2018: £101 million) include businesses sold, onerous contracts and exchange rate movements, £36 million restructuring and separation costs and £35 million goodwill impairment relating to Brazilian businesses acquired in 2012.

Speaking about this latest set of financials, G4S CEO Ashley Almanza commented: “In the first half of this year, our improving sales performance in both Secure Solutions and Cash Solutions saw the Group deliver underlying revenue growth of 4.7%. This growth, together with new contract wins, supports our medium-term revenue goal of 4% to 6% per annum.”

Almanza added: “Our revenue mix continued to improve as our technology-enabled revenues in Secure Solutions grew by 14.8% across the globe and our North American cash technology revenues grew by 33%. The Group’s half-year performance, sales pipeline, revenue momentum and productivity programmes support a positive outlook.”

Ashley Almanza

Ashley Almanza

On a structural note, Almanza stated: “Our separation review is now complete and the Board has approved the separation of Cash Solutions from the Group. As a result, we have set in train plans for the de-merger of Cash Solutions in H1 2020. We believe that this will create two strong and focused businesses each with the clear potential to capitalise on market-leading positions and unlock substantial value for customers, shareholders and employees.”

Since announcing the separation review in December last year, G4S has received a number of unsolicited expressions of interest from third parties to acquire parts or all of the Cash Solutions business. The company has actively engaged with these parties and the Board will continue to evaluate proposals for all or parts of the business alongside the implementation of the aforementioned de-merger plans, although the business is swift to point out that no assurance can be provided at this stage that any third party proposals will lead to a transaction.

In addition to the separation of Cash Solutions, the Group will be managing for value or exiting a number of non-core businesses and implementing programmes to deliver further identified operational efficiencies. The company expects that, over time, these combined actions will provide further financial strength and flexibility to support the attractive growth opportunities in its core businesses.

*Read the full 42-page financial statement on the G4S website

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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