G4S de­merger talk sparks re­cov­ery

The Daily Telegraph - Business - - Business - TOM REES

TROU­BLED se­cu­rity out­sourcer G4S started to re­cover from a £600m plunge in value as City scrib­blers urged its man­age­ment to con­sider a “rad­i­cal” de­merger to re­boot its stut­ter­ing turnaround.

The FTSE 250 con­trac­tor’s shares plum­meted 18pc fol­low­ing Wed­nes­day’s profit warn­ing and RBC Cap­i­tal Mar­kets said it was “throw­ing in the towel” on its “top pick” rec­om­men­da­tion af­ter a string of dis­ap­point­ments.

An­a­lyst An­drew Brooke ar­gued the sale or de­merger of its se­cure cash trans­fer or prison ser­vices busi­nesses could be needed to shake up the com­pany. He ramped up the pres­sure on boss Ash­ley Al­manza by point­ing out he has taken home £15m in his five years in charge but failed to make “much progress as far as share­holder re­turns are con­cerned”.

G4S ad­mit­ted on Wed­nes­day that full-year profit be­fore in­ter­est, tax and amor­ti­sa­tion would be flat this year, just seven months af­ter promis­ing three years of growth in a bullish up­date to in­vestors. More calls for a break-up from City an­a­lysts helped G4S claw away from a two-year low to re­gain 5.7p to 183.8p. Else­where, shares in satel­lite op­er­a­tor In­marsat fell out of or­bit af­ter its mar­i­time sales stum­bled as its strug­gles to fend off mid-mar­ket com­peti­tors. In­vestors ruth­lessly pun­ished Bri­tain’s big­gest satel­lite op­er­a­tor for its mar­i­time woes de­spite its avi­a­tion di­vi­sion beat­ing City ex­pec­ta­tions.

The com­pany is stuck in a “dog­fight” for the mar­i­time mid­mar­ket and yes­ter­day’s 36p plunge to 424.4p “con­firms that mar­i­time trumps avi­a­tion when it comes to sen­ti­ment”, Giles Thorne at Jefferies told clients.

A profit warn­ing sent waste man­age­ment com­pany Re­newi slid­ing 5.1p to 50p as it re­vealed reg­u­la­tors have de­layed the re­sump­tion of full pro­duc­tion at a plant in the Nether­lands. Aquis Ex­change, a sub­scrip­tion­based chal­lenger stock ex­change, surged 67.5p to 525p af­ter mak­ing fur­ther gains in mar­ket share. Debt­col­lec­tion com­pany Ar­row Global soared 40p to 239p af­ter a 10pc jump in un­der­ly­ing profit af­ter tax.

BP slumped to the bot­tom of the FTSE 100 ris­ers’ board as oil prices flirted with a six-month low ahead of Opec’s meet­ing. Brent crude slipped a fur­ther 1.4pc to $71.09 per bar­rel, while BP closed 15.3p lower at 529p.

The post-midterms rally on global mar­kets ran out of steam as at­ten­tion turned to the Fed­eral Re­serve’s pol­icy meet­ing and rate-set­ters’ out­look for next year. Stocks drifted in lack­lus­tre trad­ing ahead of the de­ci­sion, with the FTSE 100 held in pos­i­tive ter­ri­tory by a trio of strong gains from As­traZeneca, Coca-Cola HBC and Burberry. The in­dex closed 23.40 points higher at 7,140.68, out­per­form­ing its ri­vals in Europe.

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