G4S shares surge as outsourcer beats first half expectations
Outsourcing giant G4S said that it had beaten its first half expectations for profit after a solid performance by its core security division.
Shares in the firm rose 6.2 per cent as markets opened this morning.
The figures
Profit at the firm fell 4.6 per cent over the period, down from £196m last year to £187m this year. Analysts had predicted profit of £159m.
Revenue also slid 1.5 per cent to £3.35bn, down from £3.4bn the year before.
Earnings per share remained in line with the previous year at 6.3p per share, although the company said it would hold off on paying dividends for now.
Free cash flow also swung back into the positive in the period, from an outflow of £51m last year to £178m in the last six months.
G4S said it had received £522m from the sale of its cash handling business to US firm Brink’s Group, which was announced in February.
Why it’s interesting
Last week G4S said that it would make over 1,000 job cuts, mainly in its cash solutions division, as part of a restructuring process.
Today it said that it expected to save £100m through restructuring programmes in 2020.
G4S said the combination of the sale of its cash handling business and the coronavirus pandemic had encouraged it to speed up the previously announced initiatives.
The firm added that the expected cost of the pandemic in those countries where it had received government support was £20m to £25m.
This came from a combination of lost revenue, safety measures and retaining staff who otherwise may have been at risk.
What G4S said
Chief executive Ashley Almanza said: “G4S has an unrivalled market footprint, a well-diversified revenue base and pipeline, and growing capability in the delivery of integrated technology-enabled solutions.
“We believe that the group is very well positioned to emerge from the pandemic as a leaner and more focused market leader in the global security market and to create material value for all stakeholders.”