G4S boasts ‘resilient’ results following hostile takeover rejection
Global security giant G4S today announced “resilient” results for the first eight months of 2020, as it shrugged off its rejection of a £3bn hostile takeover bid by rival firm Gardaworld last week.
In a trading update, FTSE 250-listed G4S today said the group’s underlying earnings for the eight months to 31 August were ahead of last year’s results for the same period.
Results within its Secure Solutions subsidiary, which represents 93 per cent of group revenue, were “broadly in line” with 2019, G4S said in a statement.
Shares fell 2.7 per cent to 188.6p this afternoon after G4S announced a 1.9 per cent year-on-year dip in group revenue.
However, the security firm said the fall was “more than offset” by tight direct and indirect cost control and reduced interest costs.
“Although the global economic outlook remains uncertain, the group’s performance in the first eight months demonstrates the strength of the business,” the firm said in a statement.
It comes after the British security giant last week rejected a hostile takeover attempt by rival Canadian firm Gardaworld, claiming the £3bn bid “significantly undervalued” the company.
The firm slammed the takeover proposal by Gardaworld — the largest privately owned security services firm in the world — adding that the timing of the bid was “highly opportunistic” given market turbulence during the pandemic.
On Friday, G4S group chief executive Ashley Almanza indicated that the firm remained open to higher bids, and that the company would “consider any credible proposal”.
“All of the directors are clear we will do what is in the best interest of shareholders and stakeholders,” he added.
G4S has offices in 85 countries, and provides security services across a large swathe of institutions including prisons, embassies and even the Pentagon in Washington.
But the group has come under fire in recent weeks over its management of UK coronavirus test centres, and has previously been embroiled in scandals over contracts with the government.
In June the Serious Fraud Office fined G4S £44m as part of a deferred prosecution agreement relating to it overcharging the Ministry of Justice for a contract.
Commenting on today’s trading update, Almanza said: “G4S today is a focused global business delivering technology-enabled security solutions.
“The benefits of our strategy, strong execution and timely response to Covid-19 continue to be reflected in the group’s results during 2020 with resilient revenue, earnings and cash flow.”