G4S shakes off tagging scandal as earnings rise
OUTSOURCING firm G4S yesterday showed that its turnaround was gathering momentum, as it posted a 13.2 per cent rise in first-half earnings on the back of £1.2bn worth of new contracts.
The FTSE 100 company, which has undergone a corporate overhaul to shrug off the prisoner tagging scandal, saw earnings rise to £86m, while revenue went up 4.1 per cent to £3.37bn. The results pleased analysts and sent shares up over five per cent.
G4S performed far better in emerging markets, where revenues rose 12.1 per cent, while developed markets’ sales were flat. The company said “much remains to be done” in its domestic market, where revenue fell two per cent to £790m.
G4S, alongside peer Serco, saw its reputation take a battering after it was found to have overcharged the UK government by tagging criminals who were dead, in prison or never tagged in the first place. It agreed to repay £108.9m in March and had a nine-month ban on winning new government work lifted in April.
The company is in the process of hiring a new UK head, after Eddie Aston quit in May – the third person to leave the role in two years.
Chief executive Ashley Almanza, who joined last year as part of a management overhaul after the allegations, called the results “satisfactory” but said there was more to be done across all markets.
G4S is ramping up its divestment strategy, having sold off six of its less profitable units over the past year. It has now decided to put 15 more divisions on the block as part of its plan to restructure the business. Shares closed 5.3 per cent higher at 273.50p.