In the UK & Ireland region, organic growth was 6% with strong growth in Secure Solutions, Utility Services and Integrated Services. These gains were partly offset by the loss of the UK Border Agency contract in May and the performance of the business in Ireland, where turnover declined by 3% due to continuing difficult market conditions.
New contracts won in the Government sector during the first half of the year included:
Once fully up-and-running, G4S states that these contracts “will more than offset the loss of the UK Court Services contract” (which will transfer to a competitor at the end of this month).
New contracts won or commencing in the commercial sector during the first half of the year included the renewal of the security contract for RBS in the UK and a new contract for Ireland, contracts with Hewlett Packard, the Nationwide Building Society and British Gas smart metering services and temporary contracts in Ireland to support the visits of Her Majesty Queen Elizabeth and President Obama.
In July, G4S welcomed the publication of the UK Government’s reports on ‘Open Public Services’ and ‘Competition Strategy for Offender Services’ which provide further clarity on the Government’s stance on public sector reform and the greater role of the private sector in the delivery of offender management.
In the full results report, G4S states: “We believe these reforms will improve efficiency, quality and financial accountability across the offender management sector as well as wider public services. We expect to take part in the next round of the Government’s prison competition process which was announced in July.”
As previously reported on SMT Online, there have also been a number of capability-building acquisitions in the UK and Ireland since the start of the year, with the capture of investigative services provider Cotswold Group, electronic monitoring equipment provider Guidance Monitoring (GML) and AMS, a leading security system monitoring company in Ireland.
G4S half-year report: the headline figures
*at constant (2011) exchange rates
Organic growth accelerating in most regions
Nick Buckles, the company’s CEO, commented: “Following a robust performance during the global recession, organic growth is accelerating in most regions and business sectors and we have a healthy pipeline of bidding opportunities, particularly in the UK Government market. Our new markets businesses [now worth 29% of group revenues] continue to show excellent organic growth and is up 9% overall.”
Buckles added: “We expect growth in Cash Solutions in developed markets (13% of group revenues) will continue to be impacted by low interest rates, but we’re encouraged by recent discussions with financial institutions regarding outsourcing opportunities.”
At the Capital Markets Day in May this year, the company highlighted plans to invest around GB pound 200 million per year on acquisitions while maintaining strict financial screening criteria.
“We have a strong pipeline of M&A opportunities,” asserted Buckles, “which should come to fruition within the next six to 12 months. This pipeline, together with the recovery in growth in our existing business, gives us confidence in the outlook for the full year and into 2012. That confidence is reflected in the 8% increase in our interim dividend.”
Download the full half-yearly results by accessing the dedicated web link below
