The multi-national security contractor G4S will not pay an interim dividend for 2020, the firm has said in its half year results. Revenue during the first half of 2020 was ‘adversely impacted’ by the Covid-19 pandemic, particularly in the firm’s Europe and Middle East markets and its UK Cash Solutions business.
Due to many retailers urging customers to pay using contactless cards if possible, use of cash has gone down on UK high streets, and hence need for cash handling and collection (pictured) even after lockdown and the re-opening of non-essential retail.
G4S Chief Executive Officer Ashley Almanza said: “G4S is at an important inflection point as we accelerate our transition to a highly focused global integrated security business. The benefits of our strategy, focused execution and timely response to Covid-19 are reflected in the Group’s results with resilient revenue, earnings and cash flows reported for the first six months.”
Almanza described the performance of the company in the first half of this year as ‘resilient’; but added that the ‘path of the Covid-19 pandemic and its economic impact remain uncertain’. He spoke of the firm as ‘very well positioned to emerge from the pandemic as a leaner and more focused market leader in the global security market’.
The announcement confirms that G4S has agreed a Deferred Prosecution Agreement (DPA) with the Serious Fraud Office (SFO) in the UK, arising from fraudulent financial reporting to the UK’s Ministry of Justice under electronic monitoring of offender contracts by the contractor’s UK Care and Justice Services arm in 2011 to 2012. The firm is paying a fine of £38.5m, plus £5.9m of the SFO’s costs. This fine reflects a discount of 40pc as a result of G4S’s ‘substantial cooperation’ with the SFO. More on the SFO website.
Most of the firm’s conventional cash businesses has been sold to Brink’s; this ‘enables G4S to focus on the growth of its core integrated security solutions business and the further development of the rapidly growing Retail Technology Solutions business’, he said. The firm is seeing ‘increased demand for thermal cameras, security systems integrated with healthcare applications, access control and screening personnel’.
Over the ‘economic cycle’ Almanza said that G4S expects security ‘to continue to be a growth industry’. Echoing another security multi-national, Securitas, he said that G4S is generating an increasing proportion of revenues ‘from integrated, technology-enabled solutions’; that is, rather than purely manned guarding. He said: “Our growing focus on integrated technology-enabled solutions creates additional security and efficiency benefits for customers and increases our ability to differentiate G4S’s offering in the security market, which in turn supports our goal of accelerating profitable growth.”
On the pandemic, he said: “G4S staff all over the world have responded with extraordinary courage and resilience to keep vital services and workplaces safe, clean and secure.”
Visit https://www.g4s.com/.
