G4S wipes slate clean

These results had a kitchen-sink feel about them as a series of large exceptional charges hit the reported numbers. In what Mr Almanza described as “a year of cleaning up”, G4S took a £182m write-down following a review of the balance sheet and contracts, a £68m restructuring charge, and a £136m provision for a potential settlement with the UK government for the ill-fated prisoner-tagging deal. Unlike peer Serco (SRP), G4S has not yet agreed a settlement with the state, nor has it been given the green light to return to the bidding table for central government work. G4S simply said it continues to engage in “constructive discussions” with the UK government.

But G4S did manage to show progress on an underlying basis. Stripping out all of the exceptional charges, revising the prior year figure and showing the numbers on a constant currency basis, G4S said that underlying profit before interest, tax and amortisation rose 3 per cent to £442m.

Within that group performance, there was a clear split between the results of developed and emerging markets. Developed-market underlying profit went backwards, falling 12 per cent to £270m due to a drop in US federal government spending and tough trading conditions in the Netherlands and Eastern Europe. But that drop was offset by emerging markets, where underlying profit rose 25 per cent to £216m on the back of more care and justice work in Australia and New Zealand and a strong performance in the Middle East.

Broker JPMorgan Cazenove expects adjusted earnings per share of 17.9p for the current year (2013: 14.7p).