(Alliance News) - G4S PLC on Tuesday said its continuing businesses stayed strong in the fourth quarter of 2020 and the annual revenue value of its contracts increased.
The London-listed security services firm said its continuing businesses "maintained their resilience though the balance of the year", achieving a solid underlying fourth quarter performance with revenue in-line with trends highlighted at the nine-month mark.
Profit before interest, tax, and amortisation margins also "held up well" in the final quarter of 2020.
G4S reported "very strong" net cash flow generation, ending 2020 with its net debt to earnings before interest, tax, depreciation, and amortisation ratio well within its 2.0 to 2.5 times target.
G4S said its cash flow was boosted by Covid-19 related payroll and indirect tax referrals totalling approximately GBP110 million, with around GBP80 million of this to reverse in 2001.
However, this reversal will likely be "more than offset by disposal proceeds of around GBP100 million scheduled to be received from The Brink's Co during Q1 2021, of which GBP40 million has already been received since the 2020 year end."
G4S said its 2020 new and retained contract wins has an annual revenue value of GBP3.0 billion, up from GBP2.5 billion in 2019 and noted that the GBP5.5 billion total contract value associated with the wins "provides strong support for the group's outlook".
Chief Executive Ashley Almanza said: "I'd like to thank my executive team and colleagues across G4S who, in the midst of the global pandemic, delivered a remarkable operating and financial performance, and continued to improve our health and safety performance. Our teams also produced an exceptional commercial performance with new and retained contract wins that have a total revenue value of GBP5.5 billion. These wins reflect the competitive strength of G4S's integrated service offerings and provide strong support for G4S's growth plans."
Shares in G4S were up 0.3% at 261.30 pence in London on Tuesday morning.
In December, G4S agreed to be taken over by Allied Universal in a GBP3.8 billion deal. Under the offer made by Atlas UK Bidco Ltd - which is indirectly controlled by Allied Universal - G4S shareholders will be entitled to receive 245 pence in cash for each share held. This values G4S at GBP3.8 billion. The offer remains open for acceptances until Wednesday.
By Anna Farley; annafarley@alliancenews.com
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