These results were something of a rehabilitation for G4S (GFS). After a difficult 2013, marred by the prisoner-tagging scandal and heavy provisioning, the first-half was mercifully normal. Organic revenue growth reached 4 per cent and the absence of large exceptional costs helped lift the group back into pre-tax profit. Underlying earnings rose 4 per cent to 5.6p a share, a performance described by chief executive Ashley Almanza as "satisfactory".
G4S secured £1.2bn-worth of new contracts, too, which was up a quarter from last year. Mr Almanza said the conversion of prospects in the pipeline had been "quite exceptional". He pointed out that the pipeline had also been replenished so that it still stands at a healthy £4.9bn. That's a considerable increase from £3.5bn at the end of 2013.
Still, Mr Almanza says there remains a lot to go for and a lot of work still to be done. The recent strategic review spawned a number of initiatives that are still working through, such as the divestment of non-core businesses and restructuring of the UK & Ireland and European businesses.
Investec Securities expects adjusted EPS of 14p for the full year (from 14.7p in 2013), rising to 16.8p in 2015.
| G4S (GFS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 263p | MARKET VALUE: | £4.1bn | |
| TOUCH: | 263-264p | 12-MONTH HIGH: | 267p | LOW: 225p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 53p* | NET DEBT: | 200% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 3.5 | -94 | -8.2 | 3.42 |
| 2014 | 3.4 | 85 | 3.5 | 3.42 |
| % change | -4 | - | - | |
Ex-div: 10 Sep Payment: 17 Oct *Includes intangible assets of £2.0bn, or 130p a share | ||||
