G4S outlines plans to strengthen balance sheet after disappointing first half losses
Outsourcing company G4S has announced plans to sell businesses and issue new shares to strengthen its balance sheet.
The company, whose reputation has suffered from failures at last year’s Olympic and Paralympic games and more recently from the alleged overcharging of the taxpayer for the provision of electronic tagging services, plans to place 140.9m new ordinary shares –representing up to 9.99 per cent of its existing share capital – priced at 25p each.
This comes as the group reports a drop in first half operating profit to £201m from a restated £202m the year before. Its pre-tax loss for the period was £22m – down from a £102m profit the year before. This was primarily due to a one-off £180m charge following the review of its assets and liabilities.
New chief executive Ashley Almanza said he plans to raise a further £250m from the sale of businesses, and has agreed to sell its Canadian cash security and Columbian data solutions businesses for £100m. The sale of its US business is ongoing.
The company also has plans to restructure other units, with restructuring in the UK, Europe and Ireland expected to cost £30-35m over the course of 2013 and 2014.
#G4S – H1 results 5% below our forecass but disposals and placing should be enough to shore up the balance sheet in our view
— mikeallenPGSS (@mikeallenPGSS) August 28, 2013
#G4S – good decisive start by Almanza with restructuring, disposals and placing but much more to do and won't see benefits until 2014-15
— mikeallenPGSS (@mikeallenPGSS) August 28, 2013