The Courier & Advertiser (Perth and Perthshire Edition)
Rejuvenated security firm to reveal profits
Global security giant G4S is set to report another rise in profits this week as the group continues a strong run of form that has seen it catapulted back into the FTSE 100.
A consensus of City analysts forecast the firm will see pre-tax profits for the first half of the year rise from £203 million to £230m.
Revenues are also predicted to jump from £3.5 billion to £3.7bn as its turnaround under chief executive Ashley Almanza picks up pace.
The reboot, which was launched three years ago following a prisoner-tagging scandal and its failure to supply adequate security for the London Olympics in 2012, has seen G4S sell off underperforming assets and score a number of new contract wins.
The group has offloaded more than 20 businesses since 2013, with dozens more earmarked for sale or closure.
The net result has been an increase in profits and bounce back in the share price, leading to a promotion from the FTSE 250 to London’s top tier.
G4S’s share price has risen from 188p to more than 330p over the past 12 months and at the group’s annual results earlier this year, Mr Almanza hailed “significant progress” for the once scandal-hit firm.
Sylvia Barker, analyst at Deutsche Bank, said: “G4S’s strong organic growth and divestments have rescued the balance sheet and the leverage has been brought down to levels where we believe we can see investments in the business and potentially even mergers and acquisitions.”
Ms Barker also pointed to a lucrative “Cash 360” contract with US giant Walmart that will see G4S provide cash services across the retailer’s American stores.
G4S, which books around 80% of revenues outside the UK, also stands to benefit from US president Donald Trump’s pledge to boost defence spending, in addition to potentially picking up new contracts to help with America’s immigration policy changes.
Graham Spooner of the Share Centre, said: “Investors will be concentrating on further improvements to efficiency, cost cutting and news on past loss-making contracts.”