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Olympics blunder taints G4S

RESULTS: Decent organic growth at at G4S offers hope for the future - but the group's Olympics blunder won't be easily forgotten

Full-year figures from security group G4S' (GFS) revealed decent growth in the core security business. But performance overall was hit by expensive and high profile contract mishaps - essentially its Olympics contract. Adjust for an £88m hit from that and pre-tax profit grew a modest 3.5 per cent to £266m, while the underlying group operating margin slipped 10 basis points to 7.1 per cent.

IC TIP: Hold at 299.8p

The secure solutions business grew organic revenue by 8 per cent in the year to £6bn - again, after adjusting for the Olympics contract. The division's two key growth areas were in North America, where revenue rose 11 per cent, and its developing markets unit - especially Latin America and the Caribbean - which saw revenues rise 10 per cent. Although European revenue rose just 5 per cent and the division's margin fell slightly to 7 per cent. The cash solutions, business, meanwhile, is struggling as its retailer customer base continues to feel the impact of tough trading conditions - organic revenue here rose just 3 per cent in the year to £1.29bn.

J.P. Morgan Cazenove has cut its forecast for adjusted EPS for 2013 by about 3 per cent to 25.3p (from: 21.1p in 2012).

G4S (GFS)

ORD PRICE:299.8pMARKET VALUE:£4.2bn
TOUCH:299.4-299.8p12-MONTH HIGH:311pLOW: 237p
DIVIDEND YIELD:3.0%PE RATIO:38
NET ASSET VALUE:83p*NET DEBT:146%

Year to 31 DecTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20085.9326313.26.43
20097.0130314.97.18
20107.2633516.97.90
20116.9725713.38.53
20127.501757.908.96
% change+8-32-41+5

Ex-div: 15 May

Payment: 14 Jun

*Includes intangible assets of £2.4bn, or 171p per share