G4S profits fall by third as City is unconvinced by growth talk

SECURITY firm G4S blamed movements in the pound and a series of asset sales as it reported a dive in profits by more than a third, as claims by Ashley Almanza, chief executive, that growth will return this year fell on deaf ears.

The company’s pre-tax profits fell from £219m to £139m in the six months to the end of June, which it blamed on sales of businesses which had previously contributed to the figure. It had also sold more of its assets in 2017, boosting the previous year’s total.

It has recently sold its businesses in Israel and Bulgaria, as well as its Youth Services business in North America.

Shares in the company dropped 7.8pc to 260.1p yesterday, making it the FTSE 250’s second biggest faller.

Revenues were down 7.5pc to £3.68bn, partly because 80pc of the business is overseas, and therefore has been impacted by currency changes. On an underlying basis, it grew 0.2pc.

But Mr Almanza said he was confident that the rest of the year would be positive for G4S, highlighting £700m of contract wins the company had secured since the start of the year.

He said he planned to roll out the cash technology and security technology divisions, which have been performing well, in time, but that the main areas of growth were “in markets where we already operate”.

G4S, which runs prisons and detention centres as well as managing security for large companies, is trying to recover after being hit by a number of scandals.

Michael Hewson at CMC Markets noted that G4S “along with its sector peers, has had a pretty rough ride in recent years”, but suggested that trading in the rest of the year would be in line with expectations.