9th Mar 2016 07:18
LONDON (Alliance News) - Security services provider G4S PLC on Wednesday said pretax profit slipped in 2015 due to a goodwill charge on businesses it has sold, as revenue dipped on currency movements and it booked more provisions on legacy contracts in the UK.
The FTSE 250-listed group, the world's largest security company by revenue, said its pretax profit fell to GBP78.0 million from GBP128.0 million in 2014, hit by a GBP66.0 million goodwill charge it booked on businesses it has sold and on one of its operations in Estonia.
G4S also increased provisions against onerous legacy contracts in the UK, in particular its contract running centres housing asylum seekers for the Home Office, which has been put under pressure by the significant rise in the number of asylum seekers from Syria and the surrounding region that G4S has to house under the contract and the losses it makes on all those it takes in.
Revenue fell to GBP6.86 billion in 2015 from GBP6.89 billion in 2014, as constant currency growth in emerging markets and Europe was hit by weak currencies in those regions, when translated in sterling. UK revenue also fell 3.0%. North America revenue rose 5.8%.
G4S said it has continued to make progress on its portfolio management process and has identified more businesses to be sold in the next 12 to 24 months. It expects to raise between GBP250.0 million and GBP350.0 million from those sales.
G4S will pay a flat final dividend of 5.82 pence per share, meaning its total payout will rise 1.9% year-on-year to 9.41p.
"During 2015 we made substantial progress with the strategic and operational transformation of G4S. We continue to actively manage our onerous legacy contracts in the UK which were entered into prior to 2013. We have had to increase the provisions in relation to these contracts. We have also established robust controls governing new major contracts," said Chief Executive Ashley Almanza.
"Against a background of global economic uncertainty, demand for our services has remained resilient and growth accelerated in the second half of 2015, providing good support for further operating and financial progress in 2016," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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