(Alliance News) - G4S PLC on Thursday suspended its interim payout despite posting a "resilient" first half performance.
The security services company said it has decided to prioritise the financial strength of the company as the path of the Covid-19 pandemic and its economic impact remain uncertain.
For the six months to June 30, the London-based company's pretax profit more than doubled to GBP217 million from GBP108 million a year ago. Revenue fell 7.4% year-on-year to GBP3.53 billion from GBP3.81 billion.
The rise in profit was attributed to a GBP171 million gain on disposal of conventional cash businesses to logistics company Brink's in February, enabling G4S to focus on the growth of its core integrated security solutions.
First half underlying profit before interest, tax and amortisation fell 4.6% year-on-year to GBP187 million.
The company's Secure Solutions unit saw flat revenue of GBP3.1 billion and adjusted Pbita of GBP202 million, up from GBP199 million.
The smaller Cash Solutions business recorded revenue of GBP220 million, down from GBP270 million. Adjusted Pbita fell to GBP16 million from GBP24 million.
G4S said it seeing increased demand from customers for thermal cameras, security systems integrated with healthcare applications, access control and screening personnel following the Covid-19 pandemic.
The company expects the net cost of the pandemic in those countries where it received Covid-19 related government employment support to be around GBP20 million to GBP25 million, from lost revenue and extra safety and operating costs, partially offset by the government employment support.
G4S said Thursday it has taken steps to restructure and reduce costs in a number of areas to follow-up the sale of the conventional cash businesses and to respond to the impact of Covid-19, and expect to deliver total direct and indirect cost savings of GBP100 million in 2020.
G4S took at GBP50 million charge in relation to a deferred prosecution agreement with the UK Serious Fraud Office.
The SFO on Friday last week said it received final approval to enter into a deferred prosecution agreement with G4S Care & Justice Services UK. G4S will pay a fine of more than GBP38.5 million and costs of GBP5.9 million after a probe into its financial reporting to the Ministry of Justice.
G4S Care has accepted responsibility for three offences of fraud against the Ministry of Justice between 2011 and 2012 from its contracts for the provision of electronic monitoring services. G4S Care provided electronic monitoring services to the government from 2005 to 2013, and the fraud involved a "very substantial loss to the public purse".
G4S said Thursday "resolving this long-standing matter brings certainty to G4S and allows us to focus on delivering innovative and valuable services to our customers in order to grow our business".
Shares in G4S were up 6.7% at 145.70 pence each in London on Thursday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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