G4S Underlying Profit Down In H1, Sells Certain Businesses

(RTTNews) - UK-based private security firm G4S Plc (GFS.L, GFSZY.PK) Wednesday reported a decline in underlying profit for the first half, amid challenging trading conditions in Europe. The company posted a net loss for the period, reflecting a one-off charge.

The firm also announced disposals of its Canadian Cash solutions business and Colombia Data solutions for proceeds of around 100 million pounds.

Looking ahead, Ashley Almanza, chief executive of the company stated, "In the near term, 2013 will be a year of consolidation for the group with the actions we are now taking starting to deliver tangible benefits during 2014."

The company noted that a review of the group's assets and liabilities has resulted in a one-off charge of 180 million pounds. Further, it has commenced restructuring programmes in the UK, Europe and Ireland at an expected cost of 30 million to 35 million pounds over 2013 and 2014.

G4S said it is divesting a number of non-core businesses, which will improve its strategic focus and realize substantial cash proceeds. The firm also announced its intention to raise funds through a 9.99 percent placing of new ordinary shares.

For the first half, G4S posted loss from operations before tax of 87 million pounds, compared to a profit of 48 million pounds in the previous year. Underlying pre-tax profit was 136 million pounds, lower than 148 million pounds a year ago.

On a per share basis, loss was 14.7 pence, compared to earnings of 1.6 pence per share in the prior year. Underlying earnings per share were 6.6 pence, while the company posted 7.5 pence per share last year.

The firm said it has restated its underlying results to include pensions interest under the revised employee benefits accounting standard.

Turnover for the period grew to 3.65 billion pounds from 3.45 billion pounds in the same period last year. Organic growth was 5.4 percent, with 13 percent growth in developing markets.

"There was strong demand for our services across key markets and industry sectors in the first half of the year which resulted in continued revenue growth. Growth was particularly strong in developing markets where we have excellent market positions," Almanza said.

The board has also declared an unchanged interim dividend of 3.42 pence per share, to shareholders of record on September 13, 2013, payable on October 18.

GFS.L is currently trading at 255 pence, up 3.95 percent, on a volume of 8.07 million shares.