G4S overhaul begins to pay off as profits rise

August 14, 2014 - 12:00:00 am

LONDON: G4S, the world’s biggest security company, posted a better-than-expected 6.3 percent rise in first-half profit as new Chief Executive Ashley Almanza’s overhaul began to pay off following a string of high profile fiascos.

The reputation of the British firm, whose operations range from transporting cash to running prisons and protecting ships from pirates, has been battered in recent years due to a failed merger and a number of contract scandals at home and abroad.

“The transformation of G4S is clearly underway,” Almanza, who replaced the long-serving Nick Buckles in June last year, told reporters yesterday. “There’s much more hard work to be done to capture the full potential of our strategy and to strengthen the group’s performance, but the good news is there is a lot to go for.”

In 2012 G4S failed to provide enough guards for the London Olympics, and its relationship with the British government worsened last year when it was banned for around nine months from new work after being found to have charged for tagging criminals who were dead, in prison or never tagged.

In the past year, Almanza has overhauled G4S management to improve its focus on contract risks and has restructured its British business to better serve government, whose work generates almost 10 percent of its turnover. Its ban was lifted in April and the firm has won government contracts since. More widely, Almanza’s moves to strengthen the company’s finances, clean up its sprawling portfolio, reduce costs such as IT and invest in strong emerging markets growth helped the firm post an underlying operating profit of £185m ($311m) for the six months to June 30, ahead of a consensus forecast of £177m.

Its group margin rose 10 basis points to 5.5 percent. The firm said it had won £1.2bn of contracts in the half and had £4.9bn of new work to bid for as of June 30.