G4S first-half profit rises on emerging markets demand
13 August 2014, 15:48
London- Britain's G4S, the world's biggest security group, posted a better-than-expected rise in first-half operating profit on Wednesday, led by strong demand in emerging markets.
The firm, which is being overhauled to improve operations across its sprawling business and restore its reputation after a series of failures, said operating profit for the six months to June 30 was 185 million pounds ($311 million), ahead of a consensus forecast of 177 million.
The group said it had sold six businesses in the past year and decided to discontinue 15 largely loss-making small businesses, which represent less than 1 percent of group turnover, as part of its portfolio review announced last year.
G4S said it was also in detailed talks with a potential buyer for its U.S. government solutions business.
Revenue grew 4.1 percent to 3.37 billion pounds, led by a 12 percent rise in emerging markets, versus a flat performance in developed markets, where growth in North America offset a decline in Europe.
The group margin rose 10 basis points to 5.5 percent.
G4S said it had won 1.2 billion pounds of work in the first half of the year.
The company's woes began when it failed to provide enough security guards for the 2012 London Olympics and got worse when it was banned for around nine months from new UK government work after being found to have charged for tagging criminals who were dead, in prison or never tagged.
That scandal, which also involved rival Serco, remains the focus of a probe by Britain's Serious Fraud Office. Separately, the firm is part of an Australian investigation into deadly clashes at a detention centre in Papua New Guinea where it provided security.
After just over a year in the job, Chief Executive Ashley Almanza has set about improving management and attitude to risk, strengthened finances with a share sale and cut costs. He has also pushed to better integrate the group and sell off weak units in favour of investment in high-growth developing markets.
"The transformation of G4S is clearly underway," Almanza told reporters on Wednesday.
G4S shares are up 6.5 percent on a year ago to 259.8 pence, valuing the business at 4 billion pounds.