The group set to provide security for the London Olympics and manage a number of private prisons, G4S, announced its first set of results following its failed £5.2bn bid for ISS. Revenue was boosted by strong growth in developing markets and, although underlying EPS was 6 per cent ahead, weakening margins and £55m bid costs weighed on reported pre-tax profits.
The group's core business of secure solutions, responsible for 83 per cent of business, reported revenue up 5.6 per cent. This was driven by 9 per cent growth in the developing world and supported by solid growth in Europe after significant contract wins for airport security in Belgium and the administration of Swedish Parliament.
Cash solutions, which is responsible for the balance of business, continues to struggle with organic revenue declines of a percentage point in both Europe and North America being offset by growth in developing markets. This negative developed world growth was exacerbated by the cash solutions margin weakening by 120 basis points to 10.5 per cent.
Chief executive Nick Buckles repeated his goal of growing developing world revenues to half of the group by 2019. Analysts Panmure Gordon forecast adjusted EPS of 25.5p for the coming year (22.8p in 2011).
G4S (GFS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 285p | MARKET VALUE: | £4.0bn | |
| TOUCH: | 284-285p | 12-MONTH HIGH: | 295p | LOW: 214p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 106p* | NET DEBT: | 105% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 4.48 | 216 | 11.5 | 4.96 |
| 2008 | 5.93 | 263 | 13.2 | 6.43 |
| 2009 | 7.01 | 303 | 14.9 | 7.18 |
| 2010 | 7.26 | 335 | 16.9 | 7.90 |
| 2011 | 7.52 | 279 | 14.7 | 8.53 |
| % change | +4 | -17 | -13 | +8 |
Ex-div: 9 May Payment: 15 Jun *Includes intangible assets of £2.5bn, or 174p a share | ||||
