Look out Serco, G4S is leaner and meaner – Bottom Line
Serco should sit up and take notice of G4S’ progress. While both firms were in the mire last year due to a prisoner tagging scandal, G4S swiftly set about overhauling its management and streamlining the business.
And it’s working. Admittedly, most of G4S’ growth is coming from emerging markets rather than the UK, but a 13.2 per cent rise in first-half earnings and £1.2bn of new contracts is not to be sniffed at.
The company is cutting costs such as IT and trimming the fat from its portfolio, selling off a number of unprofitable businesses to propel it into future growth.
Compare that to Serco’s results the day before, which warned of lower revenues next year after first-half profit nosedived 66 per cent.
Serco’s boss Rupert Soames must have choked into his cornflakes yesterday morning in anticipation of the inevitable comparisons.
Now G4S is certainly making progress but chief executive Ashley Almanza is adamant there is still some way to go.
With the UK market – which makes up 22 per cent of sales – reporting flat revenues in the first half, he’s right.
A recovery takes time and it is unsurprising that the UK is causing G4S trouble, with a Serious Fraud Office investigation still underway.
But much progress has been made in rebuilding relations with the government and G4S seems set to reap the rewards.