Positive Points: The relatively new Chief Executive has announced a number of initiatives, including increased investment in customer services and the sale of non-core businesses. A number of non-core businesses have been sold, with the group highlighting "35 businesses to grow, restructure or recycle capital." An increased focus on disciplined financial management is also being adopted. The group's balance sheet has been strengthened through the placing of up to approximately 140.9 million new ordinary shares representing up to 9.99% of the company's existing issued share capital. Management previously noted that "balance sheet repair is required to reduce the current high level of gearing (Net Debt/EBITDA of 3.2x at 30 June 2013) in order to provide greater flexibility to invest in the business and to reduce the risk of a credit downgrade and its associated cost." Developing or emerging markets grew on an organic basis by 14% for the nine month period. Despite the Olympics fiasco, the company commenced new contracts of £200 million annual value with the UK government during 2012. Management changes have been made. The appointment of Adam Crozier of both Royal Mail and ITV fame was previously announced. Ashley Almanza, former CFO of BG Group is now the group's Chief Executive, whilst the newly announced Chief Financial Officer has come from Misys and has previous experience at both BT Group and Logica. The half year dividend payment was held. G4S is a major global security company, with operations in more than 115 countries.
6 Nov '13
Negative Points: Management announced investment of between £15 million and £20 million in customer service and generating organic growth - a likely drag on earnings during the next financial year. The company highlighted "challenging market conditions in Europe and lower US federal government spending which has affected our secure solutions and systems businesses." On 4 November, the UK government's SFO notified the company that it opened an investigation into the provision of electronic monitoring services which commenced in April 2005. In the wake of the Olympics fiasco, the company's reputation has arguably been damaged. The Olympics problems dominated the 2012 full year results. "The proposed closure of 30 prisons and other cost reductions by the Netherlands Ministry of Justice will have a significant negative impact on the group's Dutch business which provides staff to the prisons" management previously noted. The company is exposed to foreign exchange risk.
6 Nov '13
Trading and strategy update: The news failed to inspire, with the share price down over 3% in early stockmarket trading. Whilst trends from the first half of 2013 had broadly continued into the third quarter, additional investments announced going forward were considered by analysts to provide a likely drag on earnings during the next financial year. Management announced investment of between £15 million and £20 million in customer service and generating organic growth. Furthermore, the strategic update provided no surprises in terms of speculated business disposals. Nonetheless, the board had identified 35 businesses to grow, restructure or recycle capital. Increased disciplined financial management is being adopted, whilst management noted that "the global security market has strong structural growth characteristics. According to Freedonia 2013, the global security market is expected to grow 7.3% between 2011 and 2016 with high single digit/double digit growth in emerging markets where G4S has a unique established position" - the company's emerging markets businesses currently accounts for more than 40% of group profits. In all, tough trading conditions in Europe and the US, along with uncertainties such as the UK government's investigation into the provision of electronic monitoring services, currently weigh against management initiatives and growth generated in the emerging markets,
31 Oct '13
gfs cash solutions
g4s cash solutions are to shut 6 uk branches
21 Oct '13
G4S / Current LSE headline...
Charterhouse lining up funding to purchase G4S unit Mon, 21st Oct 2013 12:48 London-based Charterhouse approached banks and its investors over financing a possible 1bn pound deal to buy G4S' cash-solutions business unit, according to three people familiar with the matter who asked not to be identified because the talks are private. G4S, the world's largest security-services provider, is aware of the proposal and discussed the sale option internally, said one of the people, according to Bloomberg News. Shares of the company are now rising by 3.72% to the 251p mark and were at the top of leader-board as of 12:48.
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