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Operating Review
 
Cash Services
 
WE PROVIDE A RANGE OF CASH SERVICES INCLUDING CASH TRANSPORTATION, COIN & CASH MANAGEMENT, ATM MANAGEMENT AND REPLENISHMENT, AND FULLY-OUTSOURCED CASH CENTRE MANAGEMENT.
 
The cash services division has developed rapidly in recent years from being a supplier of cash transportation services to a provider of a broad range of outsourced cash management services.

In order to be successful in the cash services market, it is important to have expertise not just in the logistics and management of cash and valuables, but also the cash cycle itself. By clearly understanding how cash circulates throughout an economy, we can help customers to maximise the efficiency of their cash management.

We have experts in all aspects of cash services throughout the group and we work hard to ensure that this expertise is shared across the organisation. This helps to drive growth and margin improvements.

We invest in technology to protect the cash and valuables in our care, to continuously improve our efficiency and to drive new product development. This has enabled us to move into new product areas such as the management of ATM networks, ATM engineering services and cash centre management. We are currently developing a retail cash management service which will vastly improve the efficiency of how cash is managed in the retail environment.

Countries throughout the world are at different stages of development in terms of the market for cash services. With our expertise, we can work with central and commercial banks, retailers and other customers
to assist in this market development.


In order to be successful in the cash services market, it is important to have expertise not just in the logistics and management of cash and valuables, but also the cash cycle itself.

We invest in technology to protect the cash and valuables in our care, to continuously improve our efficiency and to drive new product development.

We are currently developing a retail cash management service which will vastly improve the efficiency of how cash is managed in the retail environment.

 
     
  CHANGING BOUNDARIES / CONSTANT DEVELOPMENT  
     
  The cash services division covers a wide range of services, focused on the transportation, storage and management of cash and valuables on behalf of banks, retailers and other customers.

Services provided to customers include:

 
     
 
Transport and storage of cash and valuables
   
Retail cash office management
   
Outsourced cash centre management
   
ATM cash replenishment
   
ATM maintenance
   
ATM engineering
   
ATM network management
 
     
 
Cash Services
Key Markets
 
CASH SERVICES KEY MARKETS
 
Region    
    Market position
(by turnover)
Cash Services
     
UK   1

France   3

Germany   1

Sweden   2

Belgium   1

Netherlands   1

Poland   1

Finland   1

Canada   1

Central & Eastern Europe   1

Middle East   1

Asia   1

 
Case Study - Cash Services Finland
 
In Finland, the general public look for the sign 'Otto,' when they want to get cash from an ATM. 'Otto' actually means 'withdrawal' in Finnish. There are some 1700 cash-dispensing ATMs in the country, all of which are operated under the single ownership of Automatia which is owned by a number of banks in Finland.

Automatia subcontracts the majority of its cash centre services and transportation of notes and coins to G4S Cash Services (Finland) which operates through a nationwide network of fourteen branches. As well as basic cash management services, G4S provides ATM maintenance and cash forecasting services to Automatia. In Finland, 90% of cash is withdrawn through ATMs, so ensuring they are in working order and fully replenished on a regular basis is an essential service to the public.

G4S and Automatia have had a successful working partnership for many years. In 1999 Automatia and G4S worked together to develop a currency circulation solution using bank branches and night safes. This successful partnership continues, and in January 2006 the contract with Automatia was extended for several years, providing an opportunity to develop further innovations in cash management.

Such is the importance of the work undertaken by G4S Cash Services in Finland that, in December 2005, the Managing Director of the business was awarded The Knight of the Order of the White Rose of Finland by the country’s president for his contribution to the cash-carrying and cash processing sectors and the vital role he played in the smooth transition to the Euro.

 
 
CASH SERVICES TRADING IN 2005
 
             
* At constant
Turnover
£m
PBITA
£m
Margins
exchange rates 2005 2004 2005 2004 2005 2004
             
Europe* 688.9

640.2

58.4 44.7 8.5% 7.0%

North America* 76.9 69.6 2.8 4.2 3.6% 6.0%

New Markets* 100.5 75.7 15.5 11.7 15.4% 15.5%

Total* 866.0 785.5 76.7 60.6 8.9% 7.7%

Exchange differences   (11.5)   (1.0)    

At actual exchange rates   774.0   59.6    

 
The cash services division achieved overall organic growth of 6.2% in 2005 and margins grew strongly to 8.9%.

The UK cash services business performed very strongly in 2005, achieving good growth and improving profitability whilst absorbing a significant pay award.

In New Markets there was strong organic growth of around 20%.

 
The cash services division achieved overall organic growth of 6.2% in 2005 and margins grew strongly to 8.9%.

Overall organic growth in Europe was 5.8%, in line with the first half of 2005 despite a significant reduction in turnover in Germany caused by major price reductions across the whole of the German market.

The UK cash services business performed very strongly in 2005, achieving good growth and improving profitability whilst absorbing a significant pay award and maintaining very high levels of customer service.

There were good growth and margin improvements in the Netherlands due to excellent cost control and new business wins in the banking sector.

The performance in Germany has greatly improved compared to prior years, although the business remains slightly loss-making overall. In France, increased security and wage costs have proved difficult to pass on to customers.

Finland, Ireland, and Belgium are all performing well and Sweden showed signs of improvement in the last quarter of 2005, with a new management team driving the business forward.

In North America, the business in Canada is recovering from a substantial robbery, leading to additional security costs. New management have been appointed and we expect the business to be back on track during the first half of 2006.

In New Markets, there was strong organic growth of around 20%. Whilst all markets saw further developments in bank and ATM outsourcing, growth was particularly strong in South East Asia, the Middle East and East Africa.