G4S “delivers marked improvement in revenue generation” for Q2 and organic growth of 2.8%
As anticipated, the G4S Group has “delivered a marked improvement in revenue generation” in the second quarter of 2018, with an impressive organic growth level of 2.8% resulting in half-year organic growth of 0.2% against “demanding comparatives”.
G4S CEO Ashley Almanza commented: “Our contract wins and strong retention rate in the first half of 2018 provide revenue momentum into the second half of the year. This, together with growing technology-enabled services in both our cash and security businesses, a favourable sales mix and planned productivity benefits underpins the Group’s positive outlook for the full year.”
First half of the year highlights for G4S are numerous. Aside from the positive step change in revenue growth for Q2, there have been new contract wins of £0.7 billion (annual contract value). The Secure Solutions margin stands at 5.9% (2017: 5.9%), while the Cash Solutions margin is at 10.7% (2017: 11.0%), duly reflecting increased business development and operating costs. Operating cash flow conversion is 84% (2017: 80%) in line with the seasonal norm.
The Group was re-organised on 1 January this year to consolidate the Secure Solutions businesses into four regions (namely Africa, the Americas, Asia and Europe and the Middle East) and create a global Cash Solutions division.
The Group is now implementing a productivity programme which is designed to deliver £90 million-£100 million of recurring cost savings by 2020. A portion of these gains will be re-invested in growth, with the majority expected to benefit the bottom line.
The operational and overhead components which are expected to deliver £70 million to £80 million of savings by 2020 have, to date, been largely re-invested in sales, business development and enhanced support and control systems.