G4S (GFS) announced measures to shore up its balance sheet with its first-half results, as management attempts to wipe the slate clean following a series of recent shocks - a botched Olympics contract, profit warning, top management changes and an investigation into electronic tagging contracts. The security group is placing 140.9m new shares, representing up to 9.99 per cent of existing share capital. It's also disposing of two businesses for combined cash proceeds of around £100m.
G4S also announced restructuring programmes for the UK, Europe and Ireland businesses in an attempt to improve profitability. Recently appointed chief executive Ashley Almanza says that 2013 will be "a year of consolidation", with 2014 hopefully bringing better news as the group looks to capitalise on its global contract pipeline of £4bn a year.
The numbers themselves were a mixed bag - there was decent revenue growth, but underlying operating profit was little changed at £201m against £202m in the first half of last year. Reported numbers, meanwhile, were hit by one-off impairment charges and write-downs following a review of assets and liabilities.
Broker Citi has cut its full-year EPS estimate by 15 per cent to 16.5p (20.8p in 2012), with 17.7p forecast for 2014.
| G4S (GFS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 244p | MARKET VALUE: | £3.44bn | |
| TOUCH: | 244-245p | 12-MONTH HIGH: | 316p | LOW: 203p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 69p* | NET DEBT: | 188% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 3.45 | 48.0 | 1.60 | 3.42 |
| 2013 | 3.65 | -87.0 | -14.7 | 3.42 |
| % change | +6 | - | - | - |
Ex-div: 11 Sep Payment: 18 Oct *Includes intangible assets of £2.3bn, or 161p a share | ||||
