G4S bullish after Olympics debacle
Security firm G4S has reported a rise in revenues in 2012 and said it expects to see "good continuing organic growth" in 2013 as it attempts to put the Olympics debacle behind it.
Total revenues rose 10.4% to £7.5bn.
But the costs of the Olympics, already announced at £88m, meant pre-tax profit fell to £175m from £257m. Excluding the Olympics, pre-tax profit rose to £266m.
G4S was the worst performer on the FTSE 100 at the start of trading, with its shares falling 3.5%.
G4S was heavily criticised when it emerged it had failed to recruit enough security guards for London 2012.
In February, it announced a £70m loss on the Olympics contract, as well as other costs of £11m "relating to charitable donations and external fees" and £7m relating to sponsorship costs.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said G4S was "clearly eager to draw a line under 2012".
"As expected, losses in relation to the Olympics fiasco dominate the numbers, with pre-tax profit falling by nearly a third."
But he added: "Significant opportunities to help governments cut costs persist, while the group's track record and diversity should eventually allow it to recover from its own annus horribilis."
'Acceleration in growth'
G4S chief executive Nick Buckles said in a statement: "Our 2012 financial results reflect the significant exceptional costs associated with the Olympic contract and our overhead reduction programme, together with the large impairment charge related to the discontinued US Government Solutions business.
"Despite these issues, the underlying business has performed well in 2012, with an acceleration in organic turnover growth to 7% and with margins holding at over 7%."
G4S said growth was largely driven by new North American commercial and UK government contracts as well as strong growth in developing markets, which now account for a third of group revenues.
Despite continued challenges in continental Europe, the group was bullish in its outlook for the year ahead.
"Developing markets growth, investment in key sector expertise and outsourcing trends continue to be key business growth drivers and so, overall, the group expects to see good continuing organic growth and margins to be maintained," it said.
The board recommended a total dividend for 2012 of 8.96p per share, up 5% on 2011, and said it expected to continue to increase dividends broadly in line with earnings.
G4S has also announced that former BG Group chief financial officer (CFO) Ashley Almanza will replace group CFO Trevor Dighton, who retires on 30 April.